During the current year, Kingbird Corporation (a calendar year C corporation) had the following income and expenses: On October 1, Kingbird Corporation made a contribution to a qualified charitable organization of $9,000 in cash (not included in any of the above items). Determine Kingbird's charitable contribution deduction for the current year.
A)$9,000.
B)$7,500.
C)$6,650.
D)$6,450.
E)None of the above.

Question

During the current year, Kingbird Corporation (a calendar year C corporation) had the following income and expenses:  On October 1, Kingbird Corporation made a contribution to a qualified charitable organization of $9,000 in cash (not included in any of the above items). Determine Kingbird's charitable contribution deduction for the current year.
A)$9,000. 
B)$7,500. 
C)$6,650. 
D)$6,450. 
E)None of the above.

Quizplus · Accepted Answer

Charitable contributions made by C corporations are limited to up to 10% of the corporation's taxable income before the charitable contribution deduction. In this case, Kingbird's taxable income before the charitable contribution deduction is $75,000 ($100,000 - $25,000), so the maximum charitable contribution deduction is $7,500 (10% of $75,000). Therefore, the answer is B) $7,500.

During the Current Year, Kingbird Corporation (A Calendar Year C