Ramon had AGI of $180,000 in 2019. He is considering making a charitable contribution this year to the American Heart Association, a qualified charitable organization. Determine the current allowable charitable contribution deduction in each of the following independent situations, and indicate the treatment for any amount that is not deductible currently. Identify any planning ideas to minimize Ramon’s tax liability. a. A cash gift of $95,000. b. A gift of OakCo stock worth $95,000 on the contribution date. Ramon had acquired the stock as an investment two years ago at a cost of $84,000. c. A gift of a painting worth $95,000 that Ramon purchased three years ago for $60,000. The charity has indicated that it would sell the painting to generate cash to fund medical research. d. Ramon has decided to make a cash gift to the American Heart Association of $113,000. However, he is considering delaying his gift until next year when his AGI will increase to $300,000 and he will be in the 32% income tax bracket, an increase from his current-year income tax bracket of 24%. Ramon asks you to determine the tax savings from the tax deduction in present value terms if he were to make the gift this year rather than delay the gift until next year. See Appendix H for the present value factors, and assume a 6% discount rate.
Ramon had AGI of $180,000 in 2019. He is considering making a charitable contribution this
year to the American Heart Association, a qualified charitable organization. Determine the
current allowable charitable contribution deduction in each of the following independent
situations, and indicate the treatment for any amount that is not deductible currently. Identify any
planning ideas to minimize Ramon’s tax liability.
a. A cash gift of $95,000.
b. A gift of OakCo stock worth $95,000 on the contribution date. Ramon had acquired the
stock as an investment two years ago at a cost of $84,000.
c. A gift of a painting worth $95,000 that Ramon purchased three years ago for $60,000.
The charity has indicated that it would sell the painting to generate cash to fund medical
research.
d. Ramon has decided to make a cash gift to the American Heart Association of $113,000.
However, he is considering delaying his gift until next year when his AGI will increase to
$300,000 and he will be in the 32% income tax bracket, an increase from his current-year
income tax bracket of 24%. Ramon asks you to determine the tax savings from the tax
deduction in present value terms if he were to make the gift this year rather than delay the
gift until next year. See Appendix H for the present value factors, and assume a 6% discount rate.
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