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

The maximum deductible charitable contribution for a corporation is generally limited to 10% of its taxable income. In this case, Kingbird Corporation's taxable income is $75,000 ($100,000 gross income minus $25,000 deductions), therefore the maximum deductible charitable contribution is $7,500 (10% of $75,000). Even though Kingbird Corporation made a cash contribution of $9,000, it can only deduct $7,500 as a charitable contribution for the current year.

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