IRS Charitable Organizations 5

Question 1

What is the maximum charitable contribution deduction for cash donations to a public charity as a percentage of the donor's adjusted gross income (AGI)?

Accepted Answer

60%

Answer

Under current law, cash contributions to public charities are deductible up to 60% of the donor's AGI, with any excess carried forward up to five years.

Question 2

Which of the following is NOT a qualifying distribution for purposes of a private foundation's 5% minimum distribution requirement?

Accepted Answer

Investment in for-profit securities to earn income for the foundation

Answer

Investments in for-profit securities for income purposes are not qualifying distributions; qualifying distributions must be made directly for exempt purposes.

Question 3

An organization applies for 501(c)(3) status but the IRS issues a proposed adverse determination. What is the organization's first option for appeal?

Accepted Answer

Request a conference with the IRS Office of Appeals

Answer

Upon receiving a proposed adverse determination, an organization may first request a conference with the IRS Appeals Office to contest the finding.

Question 4

A donor contributes a vehicle worth $4,500 to a charity that sells it immediately for $3,200. What amount may the donor deduct?

Accepted Answer

$3,200

Answer

When a charity sells a donated vehicle without significant intervening use, the donor's deduction is limited to the gross proceeds from the sale ($3,200), not the claimed FMV.

Question 5

Which type of organization can receive tax-deductible contributions but is NOT classified as a 501(c)(3) organization?

Accepted Answer

A veterans' organization described in IRC Section 170(c)(3)

Answer

Certain veterans' organizations described in IRC Section 170(c)(3) can receive tax-deductible contributions even though they are not 501(c)(3) organizations.

(IRS) Internal Revenue Service Certified Practice Test

(IRS) Internal Revenue Service Certified Practice Test

IRS Charitable Organizations 5