Heron Corporation, a calendar year C corporation, had an excess charitable contribution for 2015 of $5,000. In 2016, Heron made a further charitable contribution of $20,000. Heron's 2016 deduction is limited to $15,000 (10% of taxable income). The 2016 contribution must be applied first against the $15,000 limitation.

Question

Quizplus · Accepted Answer

This is correct according to the rules governing the limit on charitable contributions for C Corporations. The excess charitable contribution from 2015 is carried forward to the next year and added to the current year’s contribution to determine the limit. The current year’s contribution is applied first against the total limit and any excess is carried forward to future years.

Heron Corporation, a Calendar Year C Corporation, Had an Excess