While preparing the 1040-X, I noticed something I do not understand. In 2021 my charitable deductions included direct cash, cash to a donor advised fund, and appreciated equities to a donor advised fund. If I change the direct cash donation to a 50% organization (instead of 50%/100%), then TurboTax does two things:
1) it pushes the entire equity contribution out as a carryforward
2) it reports the total cash (direct + DAF) as a full deduction. This total is around 58% of AGI.
This seems to be the best option, since including the equity contribution would limit the total to 50%.
However, the IRS computer limited total deductions to 60% of AGI. This seems strange. If it retained the equity deduction, I would expect the limit to be 50% of AGI. And it if dropped the equity deduction, I would expect the limit to match TurboTax at 58% of AGI. So it seems like the IRS computer included at least part of the equity deduction but limited the total to 60%. Unfortunately, the IRS transcript only shows the change in total charitable deductions (line 14). The system does not show modified entries for lines 11 or 12.
Does this make sense?
