Joseph Thompson is president and sole shareholder of Jay Corporation. In December 2019, Joe asks your advice

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Joseph Thompson is president and sole shareholder of Jay Corporation. In December 2019, Joe asks your advice regarding a charitable contribution he plans to have the corporation make to the University of Maine, a qualified public charity. Joe is considering the following alternatives as charitable contributions in December 2019: 

Fair Market Value (1) Cash donation $200,000 (2) Unimproved land held for six years ($110,000 basis) 200,000 (3) Maize Corporation stock held for eight months ($140,000 basis) (4) Brown Corporation stock held for nine years ($360,000 basis) 200,000 200,000


Joe has asked you to help him decide which of these potential contributions will be most advantageous taxwise. Jay Corporation’s taxable income is $3.5 million before considering the contribution. Rank the four alternatives and write a letter to Mr. Thompson communicating your advice. The corporation’s address is 1442 Main Street, Freeport, ME 04032.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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South-Western Federal Taxation 2020 Essentials Of Taxation Individuals And Business Entities

ISBN: 9780357109175

23rd Edition

Authors: Annette Nellen, James C. Young, William A. Raabe, David M. Maloney

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