Three years ago, Barbara donates a painting that cost $7,000, to a university for display in the president's office. The fair market value of the painting on the date of the gift is $14,000. If Barbara had sold the painting, the difference between the sales price and her cost would have been a long-term capital gain.
How much is Barbara's charitable contribution deduction for this donation?
It is the gain a seller will earn on selling any capital asset. A capital asset includes investments, bonds, stocks, homes, etc. The tax rate on capital gains is less than on ordinary gains.
Answer and Explanation: 1
The charitable contribution deduction is $7,000. The seller can claim the deduction equal to the asset's value in his books at the time of donation....
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fromChapter 12 / Lesson 3
Capital gains include income from any sold stock, but there are certain tax advantages to treating stocks as a long-term investment. Learn the difference between short- and long-term capital gains and why those differences matter with regard to profit.