Solution
Discussion Question 3-11 (LO. 1)On December 27, 2018, the directors of Partridge Corporation, an accrual basis calendar year taxpay$10,000 to the American Cancer Association. The payment is made on April 12, 2019.Can Partridge deduct the charitable contribution in 2018?
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9/17/2018
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Discussion Question 3-12 (LO. 1, 6)The board of directors of Orange Corporation, a calendar year taxpayer, is holding its year-end meeting on December 27, 2018. One topic on the board's agenda is the approval of a $25,000 gift to a qualified charitable organization. Orange has a $20,000 charitable contribution carryover to 2018 from a prior year.Classify each of the following as a "Tax issue" or "Not a tax issue" for the board to consider regarding the proposed contribution.
a.
Is Orange an accrual method taxpayer, and, if so, will the contribution be made
by April 15, 2019, so as to obtain a deduction in 2018?
Tax issue
✔
b.
Will the contribution consist of property or of cash?
Tax issue
✔
c.
If the contribution consists of property, what is the character of the property
(capital gain or ordinary income property) and the amount of the contribution
deduction?
Tax issue
✔
d.
What was last year's taxable income limitation on the deductibility of charitable
contributions?
Not a tax
issue
✔
e. When does the charitable contribution carryover period expire?
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