Chapter 5 Tax Study Guide Graded A+

16. Richard donates publicly traded Hold Company stock with a basis of $1,000 and a fair market value of $15,000 to the college he attended, which is considered a public charity. Richard has owned the shares for 10 years. How is this contribution treated on Richard's tax return? {Ans: Richard is allowed to deduct $15,000 on his Schedule A, even though his purchase price for the stock was only $1,000. His AGI must be at least $50,000 in order to deduct the full $15,000 in the current year since the contribution deduction for LTCG property is limited to 30% of AGI. Richard would have the option to elect to deduct only the basis of the stock, or $1,000, and then use the 50% AGI limitation, but would lose $14,000 of his potential charitable contribution deduction. This option is a less advantageous treatment. If his AGI was less than $50,000, any amount which is not allowed due to the AGI limitation is carried forward for as long as 5 years until there is sufficient income to take the deduction.}23. For married taxpayers filing a joint return in 2014, at what AGI level does the phase-out limit for contributions to Qualified