Earl pays $100 to attend a charity theater party. The tickets for this performance normally cost $75. His adjusted gross income is $36,000. How much can Earl deduct as an itemized deduction?
a. Correct. The deduction is limited to Earl”s payment in excess of the value of the ticket, which is $25 ($100 – $75).
b. Incorrect. The deduction is not equal to the value of the ticket, or $75.
c. Incorrect. The deduction is not the amount of Earl”s payment of $100. However, if Earl declines to accept the ticket so the organization can give it to someone else, his full payment is deductible.
d. Incorrect. The 50% of AGI limitation on cash donations, which for Earl is $18,000 (50% of $36,000), is not the amount of the deduction; it is only a limit on the deduction.
Buy an essay in any subject you find difficult—we’ll have a specialist in it ready
Ask for help with your most urgent short tasks—we can complete them in 4 hours!
Get your paper revised for free if it doesn’t meet your instructions.
Contact us anytime if you need help with your essay
APA, MLA, Chicago—we can use any formatting style you need.
Get a paper that’s fully original and checked for plagiarism