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Charitable Contribution Allowance for 2012

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JIM realizes the importance of being a good corporate citizen and makes generous contributions to worldwide charitable organizations. For 2012, JIM wants to contribute $1,500,000 to various charities. Based on 2011 tax laws, if JIM's taxable income before charitable contributions is $11,500,000 in 2012,

Calculate the charitable contribution allowance for 2012.
Provide a recommendation to JIM management regarding the tax implications of this contribution.

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Solution Summary

This solution calculates the charitable contribution allowance for 2012, and provides a recommendation to JIM management regarding the tax implications of this contribution.

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The company's taxable income was $11,500,000. According to relevant tax laws, the company cannot use more than 10% of net taxable income as a charitable deduction. 11,500,000 x .10 = 1,150,000. The company wants to donate $1,500,000 to various charities. JIM will be able to use a current ...

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