Question & Answer: Memorandum #1 For 2016, Marvel Corporation had a net taxable income before charitable contributions of 10 M. During the…..

Hello i need help on this memorandum.

Please follow the steps. The memorandum is on the picture.

Please write a short introduction introducing the client, the facts, and the issue. The introduction should be no longer than three or four sentences.

1. Summary of the facts

Write a summary of relevant facts

2. Issues

If there is only one issue, simply write the issue as a question, if there are multiple issue, write each issue as a question, and list each question

3. Conclusion

The conclusion section should also be organized according to the issue. The should answer the issue and point out pros and cons of the solution.

Memorandum #1 For 2016, Marvel Corporation had a net taxable income before charitable contributions of 10 M. During the same year, Marvel contributed 1.5 M’to the Make-A-Wish Foundation, a 501(c)(3) organization. Marvel needs to know how much of the charitable contributions will be deductible on its Form 1120. 121031580-1504049 pa 2 3 4 5 6 7 9 WE

Expert Answer

1. Summary of Facts:

Taxpayer = Marvel Corporation

FY = 2016

Taxable income before charitable contribution = 10M

Charitable Contribution to 501(c)(3) organisation = 1.5M

2. Issue

Amount of charitable contribution deductible on Form 1120.

3. Analysis and conclusion:

Though charitable donation to 501(c)(3) is tax deductible; but the amount of deduction cannot exceed 10% of taxable income. Excess donation if any can be carried forward to next year. So, the maximum amount of deduction that can be claimed by Marvel Corpporation is 1M (10%*10M). However, remaning 0.5M (1.5M-1M) can be carried forward and claimed in next year.

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