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In December of each year, Eleanor Young contributes 10% of her gross income to the United Way (a 50% organization). Eleanor, who is in the 24% marginal tax bracket, is considering the following alternatives for satisfying the contribution. Fair Market Value (1) Cash donation $113,800 (2) Unimproved land held for six years ($17,070 basis) $113,800 (3) Blue Corporation stock held for eight months ($17,070 basis) $113,800 (4) Gold Corporation stock held for two years ($136,560 basis) $113,800 Eleanor has asked you to help her decide which of the potential contributions listed above will be most advantageous tax-wise. Evaluate the four alternatives and complete a letter to Eleanor. Determine the amount of the charitable contribution for each option. Charitable Contribution Cash donation Unimproved land held for six years ($17,070 basis) Blue Corporation stock held for eight months ($17,070 basis) Gold Corporation stock held for two years ($136,560 basis) Ms. Eleanor Young 2622 Bayshore Drive Berkeley, CA 94709 Dear Ms. Young: I have evaluated the proposed alternatives for your current year-end contribution to the United Way. I recommend that you sell the Gold Corporation stock and donate the proceeds to the United Way. The four alternatives are discussed below. charitable contribution deduction. A donation of cash, the unimproved land, or the Gold stock will result in a $ Donation of the Blue Corporation stock will result in only a $ charitable contribution deduction. A direct contribution of the Gold Corporation stock will be a decision from a tax perspective in that the decline in value deductible and the amount of the charitable contribution would be $ If you sell the Gold stock and give the proceeds to United Way, the donation of the proceeds will result in a $ charitable contribution deduction. In addition, sale of the stock will result in a $ long-term capital loss. If you have capital gains of $ or more this year, you can use the entire loss in computing your current taxable income. If you have no capital gains this year, you can deducts of the capital loss this year and carry over the remaining loss to future years

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