Mr. Haugh owns a sporting goods store as a sole proprietorship. This year, he donated baseball equipment (bats, gloves, balls) to the local YMCA to use in their community sports programs. His cost basis in the inventory items was $45,700, and their retail value was $68,200. Which of the following statements about this donation is true?

Mr Haugh is allowed a $68,200 charitable contribution deduction

Mr Haugh must recognize $22,500 ordinary business income and is a $68,200 charitable contribution deduction

My Haugh is allowed a $45,700 charitable contribution deduction

Mr Haugh must recognize $22,500 ordinary business and is allowed a $68,200 business deduction