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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16579
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Allison is the sole shareholder of Destiny Corporation, which

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Allison is the sole shareholder of Destiny Corporation, which operates a travel agency for business travelers. Allison would like the corporation to donate some used computers to a local private school dedicated to the education of young ladies. The private school is a tax-exempt organization that qualifies donors for the charitable deduction. The corporation purchased the computers two years ago for a total cost of $90,000, and for tax purposes expensed this entire amount in the year of the purchase under the first-year expensing rule of Section 179 of the Internal Revenue Code. Currently the fair market value of the computers is $40,000. Allison has asked you to determine what the corporation's tax deduction will be for this donation. The corporation's taxable income is sufficient for it deduct up to $50,000 in charitable contributions. find the answers without using irc publications
Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Allison can deduct the fair market of the property on the date of the donation. The fair market value is $40,000 therefore that is what she can deduct.

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Customer: replied 4 years ago.

I need more detail such as which rule from the irc you based that answer.

IRC Section 170

CLICK HERE

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Customer: replied 4 years ago.


what about the fact that Allison used section 179 the year she purchased the computers. isn't that property with a zero basis at the time of the donation?

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Thank you for the positive rating. Please remember me the next time you have a financial question. Simply enter "MyVirtualCPA" in the subject of your question, and it will be routed directly to me. Thank you again for using JustAnswer