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 $6,300 in cash (not included in any of the above items).Determine Kingbird's charitable contribution deduction for the current year.
A)$0.
B)$4,230.
C)$4,500.
D)$6,300.
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 $6,300 in cash (not included in any of the above items).Determine Kingbird's charitable contribution deduction for the current year.
A)$0. 
B)$4,230. 
C)$4,500. 
D)$6,300. 
E)None of the above.

Quizplus · Accepted Answer

To determine the amount of Kingbird Corporation's charitable contribution deduction, we first need to calculate the corporation's taxable income before the charitable contribution:

Total income from operations: $78,000
Minus: Total expenses: $48,200
Equals: Taxable income before charitable contribution: $29,800

Next, we need to apply the 10% limitation on charitable contributions for corporations. This means that Kingbird Corporation's maximum charitable contribution deduction for the year is:

10% x $29,800 = $2,980

Since Kingbird Corporation contributed $6,300 to a qualified charitable organization during the year, its charitable contribution deduction is limited to $2,980. Therefore, the correct answer is C) $4,500 ($2,980 + $1,520 [the difference between the actual contribution and the maximum allowable deduction]).

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