If a Corporation's Cash Charitable Contributions Exceed the Charitable Contribution

question 28

Multiple Choice

If a corporation's cash charitable contributions exceed the charitable contribution deduction limit, what kind of book-tax difference is created for that year?

• A)Permanent; favorable.
• B)Permanent; unfavorable.
• C)Temporary; favorable.
• D)Temporary; unfavorable.

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Definitions:

Normal

Typically refers to something that conforms to a standard or common pattern; in statistics, a distribution that is symmetrically clustered around its mean.

Treasury Bond

A long-term, fixed-interest government debt security with a maturity of more than ten years.

Liquidity Risk

The risk of loss to an investor from the inability to sell a security to another investor at a price close to its true value.

Maturity Risk

The risk associated with the time until the bond or other fixed income instrument pays its principal back. It can affect interest rates and investment value.