Chapter 5 discussions

Chapter 5 discussions - 14. Barbara donates a painting that...

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Unformatted text preview: 14. Barbara donates a painting that cost $5,000 3 years ago to a university for display in the presidents office. The fair market value of the painting on the date of the gift is $7,000. If Barbara had sold the painting, the difference between the sales price and her cost would have been a long-term capital gain. a. How much is Barbaras charitable contribution deduction for this donation Her deduction would be $5,000, which is #7,000 less $2,000 ($7,000 - $2,000), the amount of the long-term capital gain that would have resulted if the painting was sold. b. Explain If Barbara would have donated to, say to a museum, (which would be a primary use of the painting), she would be able to deduct $7,000 for no reduced amount from the appreciation. If Barbara would have sold the painting she would have had $2,000 in long-term capital gain ($7,000 - $5,000).------------------------------------------------------------------------------------------------------------------------------------------...
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Chapter 5 discussions - 14. Barbara donates a painting that...

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