Madeoff Donated Stock (Capital Gain Property) to a Public Charity

question 48

Multiple Choice

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) $100,000
• B) $200,000
• C) $150,000
• D) $250,000
• E) None of these

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Definitions:

Absorption Costing

A technique in accounting that ensures all expenses related to production, including direct materials, direct labor, as well as variable and fixed overhead costs, are factored into the product’s cost.

Fixed Costs

Fixed expenses that are unaffected by changes in production or sales volume, encompassing rent, salaries, and insurance.

Absorption Costing

A method of accounting for all the costs associated with manufacturing a product, including all direct costs and fixed and variable overhead expenses.

Variable Costing

An accounting approach where only variable manufacturing costs are included in product costs, excluding fixed manufacturing overhead.