Practice Quiz

Financial Planner

Category - Tax Planning

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Your client has contributed $45,000 to the Red Cross which exceeds her AGI limit. How many years can she carryover the excess?
  1. 1 year
  2. 5 years
  3. Until all excess is deducted
  4. Cannot carryover excess deductions
Explanation
Answer: B - Contributions that exceed the AGI limit for the current tax year can be carried over to each of the next five years. Carryover contributions are subject to the original percentage limits in the carryover years and are deducted after deducting allowable contributions for the current year. Use the earlier year carryover if there are carryovers from two or more years.
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