On December 28, 2018, the Board of Directors of Taupe

question 96

Essay

On December 28, 2018, the board of directors of Taupe Corporation, a calendar year, accrual method C corporation, authorized a contribution of land to a qualified charitable organization. The land (basis of $75,000, fair market value of $125,000) was acquired five years ago and held as an investment. For purposes of the taxable income limitation applicable to charitable deductions, Taupe has taxable income of $800,000 and $950,000 for 2018 and 2019, respectively. Describe the tax consequences to Taupe Corporation under the following independent situations.
a. The donation is made on February 15, 2019.
b. The donation is made on May 15, 2019.

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Definitions:

Creditor

An entity or person to whom money is owed by a debtor or borrower.

Efficient Manager

An individual who is effective at organizing resources and processes to achieve specific goals with minimum waste.

Partnership Funds

Resources or capital contributed by partners to a partnership for the purpose of its business.

Pro Rata Basis

A method of allocating amounts or resources proportionally, according to a specific rate, percentage, or share.