Martin, a single man, contributes a painting to an art museum in the current year.The museum is thrilled to get the painting because it fits perfectly into its Impressionist collection. Martin purchased the painting 10 years ago for $50,000.

At the time of the donation, the painting is worth $60,000. Martin’s adjusted gross income this year is $100,000 and his only other itemized deduction is an annual $2,000 for real estate taxes. Martin plans to retire next year. A significant portion of his income will be from tax-exempt bonds so he expects his AGI in future years will be only $15,000. Martin wants to know what his options are regarding his charitable contribution deduction and how much he should claim as a deduction this year. Compute the present value of each alternative using a 6 percent discount rate, assuming his allowable standard deduction remains unchanged.What do you recommend?

AppendixLO1