Itemized deductions problem set (Ch 10), with answers
Maxine attended two fundraising events at her church: a bingo night where she lost $28 playing bingo (but had a
very fun time!). Also, an art auction, where she bought a lovely vase for $125 (value $60) (and also had a very fun
time – I guess she was just a “fun” person). How much can she deduct, in total?
ANS: Just $65, the excess paid for the art. Bingo losses are not a contribution
2. Roland (Rollie, to his friends) donated the following items to The Heart Fund, a qualifying charity: (a) IBM
stock, cost $1,500; value $2,500, held 15 months, (b) Ford stock, cost $5,000; value $7,000, held 7 months
(c) Intel stock, cost $11,000, value $9,200, held 16 months, (d) bracelet, cost $10,000, value $8,000, (e)
inventory from his business (lawnmowers), cost $15,000, value $22,000, (f) artwork, cost $10,000, value
$12,000. When he totals up his donations, how much can he count for each item donated? Does your
answer for (f) change if the donation is to an art museum instead of to The Heart Fund?
ANS: (a) $2,500 (appreciated stock held over a year, not limited to cost); (b) $5,000 (appreciated stock not
held over a year, limited to cost); (c) $9,200 (stock that went down in value since purchase)(donation can
never exceed value); (d) $8,000 (donation can never exceed value); (e) $15,000 inventory (limited to cost);
(f) artwork that has appreciated in value, limited to cost ($10,000) unless donated to an organization to