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Charitable Contribution Deduction Limitation

Zeta Corporation reports the following results for 2006 and 2007:
Adjusted taxable income $180,000 $125,000
Charitable contributions (cash) 20,000 12,000.

The adjusted taxable income is before Zeta claims any charitable contributions deduction, NOL or capital loss carryback, dividends-received deduction, or U.S. production activities deduction.

a. How much is Zeta's charitable contributions deduction in 2006? In 2007?
b. What is Zeta's contribution carryover to 2008, if any?

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Solution (see the attachment):
Computation of charitable contributions deduction in 2006 and 2007
a. 2006: Contribution limitation: = $180,000 x 0.10 = $18,000

Solution Summary

Charitable contribution deduction limitations are analyzed for Zeta Corporation. The contribution carryover is determined.