Grocer Services Corporation (a calendar year taxpayer), a wholesale distributor of food, made the following donations to qualified charitable organizations during the year: How much qualifies for the charitable contribution deduction?
A) $15,000.
B) $16,850.
C) $17,250.
D) $19,450.
E) None of the above.

Question

Grocer Services Corporation (a calendar year taxpayer), a wholesale distributor of food, made the following donations to qualified charitable organizations during the year:  How much qualifies for the charitable contribution deduction?
A) $15,000. 
B) $16,850. 
C) $17,250. 
D) $19,450. 
E) None of the above.

Quizplus · Accepted Answer

Under the Tax Cuts and Jobs Act (TCJA), a corporation can deduct charitable contributions up to 10% of its taxable income. In this case, Grocer Services Corporation's taxable income is $168,500 (line 30 of Form 1120). Therefore, the maximum amount of charitable contributions it can deduct is $16,850 (10% of $168,500). Since the total charitable contributions made during the year amount to $17,250, only $16,850 can be claimed as a charitable contribution deduction.

Grocer Services Corporation (A Calendar Year Taxpayer), a Wholesale Distributor