hard · Certified Financial Planner Professional Conduct
McCabe, in the 37% tax bracket, wishes to donate $100,000 to a public charity. McCabe holds stock with a fair market value of $100,000 and a cost basis of $20,000, held for five years.
Assuming McCabe's AGI is $500,000, what is the most tax-efficient method of giving and the associated deduction limit?
- Sell the stock and give cash; the deduction is limited to 60% of AGI.
- Give the stock directly; the deduction is limited to the $20,000 basis.
- Give the stock directly; the deduction is limited to 30% of AGI.
- Give the stock directly; the deduction is limited to 50% of AGI.
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