Donating stock or cryptocurrency can result in significant tax savings, and Daffy is a great option for a donor-advised fund (DAF). When you contribute long-term capital assets like stock or crypto to a DAF like Daffy, you are eligible to take an immediate tax deduction for the full market value of the asset in the year the contribution is made. If the asset has appreciated in value since you bought it, you won't have to pay capital gains tax on the gain. This can represent a significant tax saving over selling the asset and donating the proceeds.
For example, if you bought a stock for $1,000 and it has increased in value to $5,000, you can donate the stock to Daffy and claim a charitable deduction of $4,000. You would also avoid paying capital gains tax on the $4,000 of appreciation. This strategy can be particularly valuable for people who own stocks or crypto that have appreciated significantly in value.
In addition to the tax advantages, donating stock or crypto through Daffy can be a convenient and efficient way to support the charities and causes you care about. Many charities have set up processes to accept stock or crypto donations, so it's often as easy as transferring the assets from your brokerage account or crypto wallet to Daffy's account.
As you consider your charitable giving for the year, consider the potential tax advantages of donating stock or crypto through Daffy. By doing so, you can support the causes you care about and potentially save on your taxes at the same time. Please note that it is always best to consult your tax specialist to understand your specific situation when making a stock or crypto contribution.
Please note that the information contained on this page is for educational purposes only and should not be considered tax advice. Any calculations are intended to be illustrative and do not reflect all of the potential complexities of individual tax returns. To assess your specific tax situation, please consult with a tax professional.