Description
Spencer, who itemizes deductions, had adjusted gross income of $60,000 for the current year.
The following additional information is available for the year:
Cash contribution to church: $ 4,000
Purchase of art object at church bazaar: 1,200 (with a fair market value of $800 on the date of purchase)
Donation of used clothing to Salvation Army: 600 (fair value evidenced by receipt received)
What is the maximum amount Spencer can claim as a deduction for charitable contributions in the current year?
Explanation & Answer
Thank you for the opportunity to help you with your question!
Well, first we look at what is fully deductible
The cash contribution is 100% fully deductible
The donation of used salvation army is 100% fully deductible (because the evidence showed fair value).
But the purchase of the art object is not. This is due to the fact that the fair market value is $800.
So, you take the 1,200 and subtract 800$ from it.
1,200-800=400.
Therefore $400 dollars is deductible.
Then you just need to add up the three things that is 100% deductible
4,000+400+600=
I noticed you did not want the answer, so, I'll leave the last step for you!