Garth Corporation Donates Inventory Having an Adjusted Basis of $40,000

question 84

Multiple Choice

Garth Corporation donates inventory having an adjusted basis of $40,000 and an FMV of $150,000 to a qualified public charity. The inventory will be used by the charity to care for the ill. The maximum charitable contribution deduction before consideration of the 10% limitation is

• A)$40,000.
• B)$55,000.
• C)$80,000.
• D)$95,000.

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Definitions:

Stamp Act

A 1765 British tax imposed on the American colonies, requiring them to pay a tax on printed materials, which sparked widespread protest.

Declaratory Act

A law passed by the British parliament in 1766 stating that the British parliament's taxing authority was the same in America as in Great Britain.

Letters from a Farmer in Pennsylvania

A series of essays written by John Dickinson in 1767 and 1768 protesting the Townshend Acts and arguing for the colonists' rights and liberties.

Declaration of Independence

The document adopted on July 4, 1776, by which the thirteen American colonies declared their independence from British rule.