In addition sale of the stock will result in a 160000 long term capital loss If

In addition sale of the stock will result in a 160000

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In addition, sale of the stock will result in a $160,000 long-term capital loss. If Jay Corporation had capital gains of at least $160,000 and paid corporate income tax in the past three years, the entire loss can be carried back and Jay will receive tax refunds for the carryback years. If Jay Corporation had no capital gains in the carryback years, the capital loss can be carried forward and offset against capital gains of the corporation for up to five years. Jay Corporation should make the donation in time for the ownership to change hands before the end of the year. Therefore, I recommend that you notify your broker immediately so there will be no problem in completing the donation on a timely basis. I will be pleased to discuss my recommendation in further detail if you wish. Please call me if you have questions. Thank you for consulting my firm on this matter. We look forward to serving you in the future. Sincerely, Richard Stinson, CPA Note to instructor : The land and stock are “unrelated use property” but they are not “tangible personal property.” 50. Gray Corporation should defer the gift of the land until 2015. This would allow Gray to fully deduct in 2014 the carryover contribution amount of $75,000. If, instead, Gray gifted the land in 2014, the corporation would lose any otherwise allowable deduction as to the $75,000 carryover amount. This occurs because current year gifts are applied against the taxable income limitation before application of any carryover amounts. Thus, the taxable income limitation for 2014 would be completely exhausted by the gift of land in 2014. Since 2014 represents the fifth and last year of the carryover period, a gift of the land in 2014 precludes any deduction for the $75,000. A gift of appreciated land held for more than one year as an investment results in a charitable deduction equal to the land’s fair market value (subject to the taxable income limitation). Assuming a gift of the land in 2015 2014 taxable income limitation: 10% × $1 million = $100,000. 2014 charitable contribution deduction: $75,000 (carryover from 2009 gift). 2015 taxable income limitation: 10% × 1.2 million = $120,000. 2015 charitable contribution deduction: $120,000 (gift of land; excess contribution of $130,000 is carried forward for up to 5 years). Assuming a gift of the land in 2014 2014 taxable income limitation: 10% × $1 million = $100,000.
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2014 charitable contribution deduction: $100,000 (gift of land; excess contribution of $150,000 is carried forward for up to 5 years). Carryover from 2009 gift ($75,000) disappears, as 2014 is the last year of the carryover period. 2015 taxable income limitation: 10% × 1.2 million = $120,000. 2015 charitable contribution deduction: $120,000 (carryover from 2014 gift; remaining $30,000 of carryover from 2014 gift carries over to 2016).
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51. Hoffman, Raabe, Maloney, Young, & Smith, CPAs 5191 Natorp Boulevard Mason, OH 45040 December 17, 2014 Mr. Dan Simms, President Simms Corporation 1121 Madison Street Seattle, WA 98121 Dear Mr. Simms: On December 12 you asked me to advise you on the timing of a contribution by Simms Corporation to the University of Washington. My calculations show that the corporation will maximize its tax savings by making the contribution in 2014.
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