Problem related to advantageous tax-wise

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Reference no: EM13132361

Joseph Thompson is president and sole shareholder of Jay Corporation. In December 2010, Joe asks your advice regarding a charitable contribution he plans to have the corporation make to the University of Maine, a qualified public charity. Joe is considering the following alternatives as charitable contributions in December 2010:

(1) Cash donation $120,000
(2) Unimproved land held for 6 years ($20,000 basis), FMV of $120,000
(3) Maize Corp. stock held for 8 months ($20,000 basis), FMV of $120,000
(4) Brown Corp. stock held for 2 years ($20,000 basis), FMV of $120,000

Joe has asked you to help him decide which of these potential contributions will be most advantageous tax-wise. Jay's taxable income is $3.5 million before considering the contribution. Rank the four alternatives and communicate your advice to Joe.

Reference no: EM13132361

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