Question

In addition to cash contributions to charity, Dean decided to donate shares of stock and a portrait painted during the earlier part of the last century. Dean purchased the stock and the portrait many years ago as investments. Dean reported the following recipients:

Charity Property Cost FMW
State University Cash $18,600 5,360
Red Cross Cash $18,600 96,400
State History Museum Antique painting 16,300 64,000
City Medical Center Dell stock 16,300 53,000


Suppose that Dean’s objective with the donation to the museum was to finance expansion of the historical collection. Hence, Dean was not surprised when the museum announced the sale of the portrait because of its limited historical value. What is Dean’s charitable contribution deduction for the painting in this situation (ignoring AGI limitations)?

Answer 1

Answer:

Answer is given below.

Explanation:

Dean charitable deductions can be calculated according to below mentioned information.

Cost of the antique painting is $5440 which is also the dean charitable contribution deduction.

Charity is the sole purpose of painting and if it is used otherwise, then its income will be treated as ordinary one and will no longer remain capital gain property.

In earlier case its AGI limit was 30% which will now become 50%.

Answer 2

Answer:

Dean's charitable donation deduction for the painting is $0

Explanation:

The donation was made to finance expansion meaning it had to be sold in order to raise funds therefore the donation does not qualify a deduction and it is not held for more than one year.