During the Year, Arlene Donates Stock She Had Purchased in 2005

question 22

Essay

During the year, Arlene donates stock she had purchased in 2005 for $30,000 to a qualified public charitable organization. The fair market value of the stock at the time of the donation is $40,000. Her adjusted gross income for the year is $80,000. If the stock donation is her only charitable contribution, what is Arlene's charitable contribution deduction? What should she consider in determining the amount of the deduction?

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Definitions:

Omission Bias

The tendency to judge harmful actions as worse, or less moral, than equally harmful omissions (inactions).

Decision Avoidance

The phenomenon where an individual or group deliberately chooses not to make a decision, often to avoid responsibility or negative outcomes.

Certainty Effect

The tendency for people to overweight outcomes that are certain relative to outcomes that are merely probable.

Entity Theorists

Individuals who believe traits and abilities are fixed and unchangeable.