ITX - 43A

Question 1

(43.1) Charitable contributions will reduce taxable income for clients whose total itemized deductions exceed the ___ deduction.

Answer 1

standard

Question 2

(43.1) Only gifts to ___ organizations are deductible. Donations to ___ are not.

Answer 2

• tax-exempt

- individuals

Question 3

(43.1) Examples of private charities

Answer 3

• veterans organizations
• fraternal orders
• private foundations

Question 4

(43.1) Examples of public charities

Answer 4

• churches
• schools
• hospitals
• governmental entities
• Red Cross
• Salvation Army
• United Way

Question 5

(43.2) If a taxpayer wants to donate funds to charitable causes but has not yet selected specific charities, the taxpayer can contribute funds to a ___ fund.

Answer 5

donor-advised fund

Question 6

(43.2) The donor-advised fund provides the taxpayer with the up-front charitable deduction and the ability to ___.

Answer 6

spread out charitable gifts over a period of years

Question 7

(43.2) The deduction for charitable gifts of cash to public charities is limited to ___% of the donor’s AGI.

Answer 7

50%

Question 8

(43.2) For cash gifts to private charities, the limit is the lesser of ___% of AGI or the difference between ___% of AGI and donations to public charities.

Answer 8

• 30%

- 50%

Question 9

(43.2) Travel for charitable purposes may be deducted by the donor based either on a rate of ___ cents per mile or on actual expenses for gas, oil, interest, and taxes on the car.

Answer 9

14

Question 10

(43.2) Appreciated Property: The deduction for gifts of property is generally the ___ of the property on the date of donation. This rule applies to gifts of appreciated capital gain property (held more than one year) if it is ___.

Answer 10

• FMV

- intangible

Question 11

(43.2) Appreciated Property: The deduction for gifts of TANGIBLE property is ___, if it is not used in the donee’s charitable purpose, or ___, if it is used in the charitable purpose.

Answer 11

• the donor’s basis

- FMV

Question 12

(43.2) Appreciated Property: Gifts of ordinary income property such as inventory, copyright work in the hands of the creator, and capital gain property held less than one year provide a deduction of only ___.

Answer 12

the donor’s basis

Question 13

(43.2) The deduction for gifts of property is limited to __% of AGI for gifts to public charities and __% of AGI for gifts to private charities. The limit can be extended to __% of AGI for gifts to public charities of appreciated capital gain property if the amount of the gift is reduced to only the donor’s basis.

Answer 13

• 30%
• 20%
• 50%

Question 14

(43.3) Any charitable contribution that is disallowed because of the limitation with respect to AGI is carried forward for __ years and may be deducted on future returns.

Answer 14

5

Question 15

(43.3) Partial-Interest Gifts to Charity: Generally, gifts to charity of less than an entire interest in property will not be ___. Exceptions include property held in a ___.

Answer 15

• deductible
• charitable lead trust or charitable remainder trust, remainder interest in a residence or farm, and other property if that is the donor’s entire interest.

Question 16

(43.3) Nondeductible contributions: No deductions is allowed for a donor’s contribution of __ to a qualified charity or for donations of the __ of property.

Answer 16

• time

- use

Question 17

(43.3) Nondeductible contributions: No charitable deduction is allowed for a transfer to a charity of a ___ life insurance policy if the charity directly or indirectly pays the premiums on the policy covering the donor.

Answer 17

split-dollar

Question 18

(43.4) When gifts of property are claimed as deductions in excess of $___ and are not publicly traded stock or cash, a donor must obtained a ___ for each item donated and must include a copy of the appraisal with his or her tax return.

Answer 18

• $5,000

- qualified appraisal

Question 19

(43.4) Appraisals: If the donation is of nonpublicly traded securities, an appraisal is not needed until the donation exceeds $___.

Answer 19

$10,000

Question 20

(43.4) Substantiation Requirements: For gifts of cash under $__, a cancelled check will satisfy the substantiation requirements.

Answer 20

$250

Question 21

(43.4) Substantiation Requirements: For noncash contributions over $___, in addition to the written acknowledgement from the charity, Form ___ must be attached to the donor’s return.

Answer 21

• $500

- Form 8283

Question 22

(43.4) Substantiation Requirements: If a taxpayer donates a vehicle worth $___ or more, the charity must report the gross proceeds on the sale of the vehicle to the taxpayer

Answer 22

$500

Question 23

(43.4) When a charitable contribution is made that is directly related to the donor’s business, and there is a reasonable expectation of a financial return on the amount given, the cost may be taken as a ___ deduction rather than as a ___ contribution. The contribution would not be subject to the __ limitation for C corporations and would not be a separately stated item for pass-through entities.

Answer 23

• business
• charitable
• 10%

Question 24

(43.5) Deductions and Calculations - Public Charities: Cash donations

Answer 24

up to 50% of the donor’s AGI

Question 25

(43.5) Deductions and Calculations - Public Charities: Long-term capital gain property (appreciated property)

Answer 25

up to 30% of the donor's AGI or 50% of AGI if valued at the donor's basis

Question 26

(43.5) Deductions and Calculations - Public Charities: Property producing ordinary income when sold

Answer 26

up to 50% of the donor's AGI | use basis when calculating deductions

Question 27

(43.5) Deductions and Calculations - Private Charities: Cash donations

Answer 27

up to 30% of the donor's AGI

Question 28

(43.5) Deductions and Calculations - Private Charities: Long-term capital gain property (appreciated property)

Answer 28

up to 20% of the donor's AGI

Question 29

(43.5) Deductions and Calculations - Private Charities: Property producing ordinary income when sold

Answer 29

up to 30% of the donor's AGI | use basis when calculating deductions