Arnold Made a Charitable Contribution of Property That He Valued

question 149

Essay

Arnold made a charitable contribution of property that he valued at $70,000. He deducted this amount as an itemized deduction on his tax return. The IRS can show that the actual value of the property is $50,000. Arnold is in the 35% income tax bracket. Determine Arnold's amount due for both tax and any penalty.

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Definitions:

Composite Volcanoes

Also known as stratovolcanoes, are large, symmetrical volcanoes composed of alternating layers of explosive ash and lava flows, often characterized by a conical shape.

Mount Pelée

An active volcano on the island of Martinique, known for its catastrophic eruption in 1902 that destroyed the town of Saint-Pierre.

Pyroclastic Flows

Hot, fast-moving and deadly mixtures of gas, ash, and volcanic matter that flow down the sides of a volcano during an eruption.

Lahars

Volcanic mudflows or debris flows that occur when volcanic materials mix with water during an eruption or from heavy rainfall on loose volcanic deposits.