10 Hour Federal Tax Law Practice Exam 2026 - Free Federal Tax Law Practice Questions and Study Guide

Nathan can claim a charitable deduction for his donation based on the fair market value of the assets he donated and their eligibility under IRS regulations. Charitable contributions must be made to qualified organizations recognized by the IRS. If Nathan's donation met these criteria, he would be able to deduct the full amount of his contribution up to the limits set by the IRS.

If Option C, which indicates $300, is the correct answer, it suggests that this value may reflect the fair market value of the assets or cash Nathan contributed, provided it was within the allowable limits for such deductions. The IRS allows individuals to deduct contributions made to qualifying charities, up to certain percentage limits of their adjusted gross income.

When determining the amount of the deduction, it’s important to consider whether the donation exceeded the annual limits for deduction or if it had any restrictions, such as being limited to a certain percentage of Nathan's income. Therefore, if the deduction amount is $300, it likely represents either the total fair market value of goods donated or the cash contribution made to a qualifying organization.