Agnes is retired and has only a $12,000 annual pension as income. In 2019, Agnes' aunt dies and leaves her land worth $1.2 million. Agnes sees no need for the land and donates it immediately to a qualified public charity. Agnes may deduct a $1.2 million charitable contribution on her 2019 tax return.

Question

Quizplus · Accepted Answer

The IRS limits the amount of charitable contributions that can be deducted to a percentage of the taxpayer's adjusted gross income (AGI). For most charitable contributions, this limit is 60% of AGI for cash contributions and 30% for contributions of other property, including land. Since Agnes' AGI is significantly lower than $1.2 million, she cannot deduct the full amount in one year.

Agnes Is Retired and Has Only a $12,000 Annual Pension