Problem 17-41 (LO. 2, 8)

In 2017, Gray Corporation, a calendar year C corporation, has a $75,000 charitable contribution carryover from a gift made in 2012. Gray is contemplating a gift of land to a qualified charity in either 2017 or 2018. Gray purchased the land as an investment five years ago for $100,000 (current fair market value is $250,000). Before considering any charitable deduction, Gray projects taxable income of $1,000,000 for 2017 and $1,200,000 for 2018.

Should Gray make the gift of the land to charity in 2017 or in 2018?

If an amount is zero, enter "0".

a. If Gray makes the gift of the land to charity in 2017: The amount of the deduction would be $___________ and the corporation is able to use $___________ of the $75,000 carryover. Therefore, Gray has a $__________ carryover to 2018, of which $__________ would be used in 2018, leaving $________to be carried over to 2019.

b. If Gray waits and makes the gift of the land to charity in 2018: The corporation would have $_______________ carryover from 2012 and $___________ carryover from 2017. In 2018, the amount of the deduction would be $ ____________and the excess of $___________ would carryover to 2019.

c. Therefore, Gray should make the gift of the land to charity in .____________