Carly Donated Inventory (Ordinary Income Property)to a Church

question 72

Multiple Choice

Carly donated inventory (ordinary income property) to a church. She purchased the inventory last month for $100,000, and on the date of the gift, it had a fair market value of $92,000. What is her maximum charitable contribution deduction for the year related to this inventory if her AGI is $200,000?

• A)$100,000
• B)$92,000
• C)$60,000
• D)$46,000 if the church sells the inventory
• E)None of the choices are correct.

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Definitions:

Trading Securities

Financial instruments such as stocks and bonds that are bought and sold for the purpose of generating profits on short-term fluctuations in their prices.

Held-to-Maturity Securities

Held-to-maturity securities are debt securities that an investor intends and is able to hold until their maturity date, recorded at amortized cost.

Unrealized Holding

Gains or losses on investments that have not yet been sold and so are not yet reflected in the income statement.

Debt Securities

Financial instruments representing money borrowed that must be repaid, which include bonds, notes, and bills.