Joseph Thompson is president and sole shareholder of Jay Corporation. In December 2020, 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 2020. 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) 200,000 (4) Brown Corporation stock held for nine years ($360,000 basis) 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 $3,500,000 before considering the contribution. Rank the four alternatives, and complete the letter to Mr. Thompson communicating your advice. Note: The land and stock are "unrelated use property," but they are not "tangible personal property". Nellen, Cuccia, Persellin, Young, & Maloney, CPAs 5191 Natorp Boulevard Mason, OH 45040 December 11, 2020 Dear Mr. Thompson: I have evaluated the proposed alternatives for your 2020 year-end contribution to the University of Maine (University). I recommend that you sell the Brown Corporation stock and donate the proceeds to the University. The four alternatives are discussed below. Donation of cash, the unimproved land, or the Brown Corporation stock each will result in a $ x charitable contribution deduction. Donation of the Maize Corporation stock will result in only a $ x charitable contribution deduction. You will benefit in two ways if you sell the Brown Corporation stock and give the $ X in proceeds to the University. Donation of the proceeds will result in a $ x charitable contribution deduction. In addition, sale of the stock will result in a $ X long-term capital loss . If Jay Corporation had capital gains of at least $1 X and paid corporate income tax in the past three years, the entire loss can be carried back and Jay will receive tax refunds for those years. If Jay Corporation had no capital gains in the carryback years, the capital loss can be carried forward and offset against capital gains of the corporation for up to five years. Jay Corporation should make the donation in time for the ownership to change hands before the end of the year. Therefore, I recommend that you notify your broker immediately so there will be no problem in completing the donation on a timely basis. I will be pleased to discuss my recommendation in further detail if you wish. Please call me if you have questions. Thank you for consulting my firm on this matter. We look forward to serving you in the future. Sincerely