Sergio owns 100% of Penguin Corporation and has handled his own accounting records and tax
preparation in previous years. He has prepared Penguin’s Form 1120 for 2022 and would like
you to review it because of several transactions that he is not sure how to handle. While
reviewing his tax return, you notice that he has a deduction for charitable contributions that
exceeds what is allowed for 2022. Sergio has reported a deduction of 25% of taxable income
before the charitable contribution deduction. The current law for 2022 indicates that the limit is
10% instead of 25%. What is your advice to Sergio? See Statements on Standards for Tax
Services at https://future.aicpa.org/resources/toolkit/statements-on-standards-for-tax-services.
