If a Corporation's Cash Charitable Contributions Exceed the Charitable Contribution

question 28

Multiple Choice

If a corporation's cash charitable contributions exceed the charitable contribution deduction limit, what kind of book-tax difference is created for that year?

• A)Permanent; favorable.
• B)Permanent; unfavorable.
• C)Temporary; favorable.
• D)Temporary; unfavorable.

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Definitions:

Require a Return

The expectation of financial gain on an investment, which can manifest as interest, dividend, or capital appreciation.

Current Value

The present worth of an asset or company based on market conditions, differing from historical costs or book value.

End of the First Year

The completion of the first 12-month period of an event or operation, typically used in financial contexts.

Risk Premium

The additional return expected by an investor for holding a risky asset over a risk-free one, compensating for the higher risk.