Canny Foods Co

Canny Foods Co. is considering three ways it could contribute to a local, qualified charity. First, it could give $10,000 in cash. Second, it could give stock it initially purchased two years ago for $8,000 but is now worth $12,000. Third, it could give items of inventory with a fair market value of $7,000 but with an adjusted basis of $3,000. Which of the following correctly describes the relation among possible charitable contributions in terms of amount deductible for tax purposes?

A) Cash > Stock > Inventory.
B) Stock > Cash > Inventory.
C) Inventory > Stock > Cash.
D) Inventory > Cash > Stock.

Correct Answer:

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