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Ramon had AGI of $180,000 in 2018. He is considering making a charitable contribution this year...

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Accounting

Ramon had AGI of $180,000 in 2018. He is considering making acharitable contribution this year to the American HeartAssociation, a qualified charitable organization. Determine thecurrent allowable charitable contribution deduction in each of thefollowing independent situations, and indicate the treatment forany amount that is not deductible currently.

d. Ramon has decided to make a cashgift to the American Heart Association of $113,000. However, he isconsidering delaying his gift until next year when his AGI willincrease to $300,000 and he will be in the 32% income tax bracket,an increase from his current-year income tax bracket of 24%. Ramonasks you to determine the tax savings from the tax deduction inpresent value terms if he were to make the gift this year, ratherthan delaying the gift until next year. See Appendix G for thepresent value factors, and assume a 6% discount rate.

                     

Answer & Explanation Solved by verified expert
4.3 Ratings (643 Votes)
As per the tax provisions the cash donation has generally a specific limit If the donation amount exceeds 50 of AGI the deduction in current year would be limited to 50 The excess amount over 50 would be allowed as deduction in the next year Both the    See Answer
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