Tax Law (Questions About Taxes)/Carryover

Advertisement


Question
John
More carryover questions.
Consider a $50K carryover remaining from an originally much larger non-capital donation that is now in it's fifth and final utilizable year. Again, a $100K AGI, which will just allow the $50K to finish up the forward carried deduction. Suppose, however, that I have also made a $10K cash donation during the year. Ordinarily, on Schedule A, line 16, I would enter the $10K, and then, on line 18, enter any carryover, UP TO $40K, limited by needing the sum of 16 and 18 to not exceed $50K on line 19. But  this would leave me with $10K unused carryover, for which additional carryover time has run out. So, must I forfeit the $10K residual carryover, or is there a way to carryover the $10K CASH donation, and be able to fully utilize the original donation's $50K?
I apologize for terribly awkward phrasing.
Thanks for your help.
DBRJ

Answer
Dave,

The ordering rules state that you first deduct the current year's contributions, then apply any carryover.  So, in the sceanario you give you would lose the 10K that is a part of the carryforward.

About the only thing you could do would be do defer the $10K amount until the start of the year after you use up all the previous amounts (or get more income :-)).

Hope this helps.

John Stancil, CPA  

Tax Law (Questions About Taxes)

All Answers


Answers by Expert:


Ask Experts

Volunteer


John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

©2016 About.com. All rights reserved.