Now is the season of giving thanks, and there are some great ways to show it. Learn how to Maximize your gift with a donor advised fund!
Some people prefer sell stock and hand over their checks to their charity of choice, and others ask:
"How can I increase the gift amount?"
If you are preparing for giving Tuesday it might be nice to know there are strategic ways to gift stock and investments to your favorite charities. One great way to do so is called a donor advised fund.
A donor advised fund, is a type of account specifically opened for charitable donations. An investor may open this account to help offset capital gains, or they may be trying to maximize their gift to their charity. Donor advised funds help reduce the tax burden an investor may receive from selling an investment, by donating the stock directly to the fund.
For example, a position with a cost basis of $5000 now has a market value of $10,000. You have two options to donate. Option A: You sell the stock for the market value and realize $5000 in capital gains. For the sake of easy math, we will use long term capital gains rates of 20%. So let’s subtract the potential taxes owed, ($1000) and write your charity a check for $9000. That’s pretty generous, but what if there was a way to give all $10,000, I’m sure the charity would appreciate it…
That’s what a Donor Advised Fund (DAF) can do for them.
Instead of selling the stock and sending a check, an investor can open a DAF and donate all $10,000 of stock directly to the fund. The charity receives 100% of the market value and the investor now has a deductible donation of $10,000 instead of $9,000. But that’s not all a DAF can do!
Ask your Financial adviser about Donor Advised Funds this Giving Tuesday and learn how you and your favorite charities can benefit from them.
Securities offered through International Assets Advisory, LLC (“IAA”) – Member FINRA/SIPC. Advisory services offered through International Assets Investment Management, LLC (“IAIM”) –SEC RIA. Blacor Investments is unaffiliated with IAA and IAIM.
The information provided in this newsletter is based on carefully selected sources, believed to be reliable, but whose accuracy or completeness cannot be guaranteed. All information and expressions of opinions are subject to change without notice and are those of Blacor Investments. Past performance may not be indicative of future results. Any information presented about tax considerations affecting client financial transactions or arrangements is not intended as tax advice and should not be relied on for the purpose of avoiding any tax penalties. You should discuss any tax or legal matters with the appropriate professional.