Madeoff donated stock (capital gain property) to a public charity. He purchased the stock 3 years ago for $100,000, and on the date of the gift, it had a fair market value of $200,000. What is his maximum charitable contribution deduction for the year if his AGI is $500,000 (before considering the itemized deduction phase-out) ? A. $100,000B. $200,000C. $150,000D. $250,000E. None of these

correct option is C. $150,000

Explanation:

given data

purchased = $100,000

fair market value = $200,000

AGI = $500,000

to find out

maximum charitable contribution deduction for the year

solution

we know that in charitable contribution that is deductible up to the 50% of modified adjust gross income

so when donations are in the form of assets that is appreciated

then deduction allow will be 30% of modified adjust gross income

hence charitable contribution = $100,000 to $200,000

and allowable deduction = 30% of $500,000

allowable deduction = $150,000

so that maximum charitable contribution deduction for the year is $150,000

correct option is C. $150,000