When it comes to contributing non-cash assets that exceed $500 in value, Daffy is a great option for a Donor-Advised Fund (DAF). If you contribute certain non-cash assets, such as cryptocurrencies and securities, that exceed $500 in value, you will be required to file an IRS 8283 Form with your federal income tax return.
Daffy makes this process simple and straightforward. This form is supported by almost all tax-preparation software providers and is an easy addition for any certified tax professional. It's always best to consult your tax specialist to understand your specific situation.
Contributions of cryptocurrencies and other forms of property may be subject to further requirements. If your crypto contributions in any calendar year exceed $5,000, the IRS requires you to obtain a qualified appraisal.
One of the significant benefits of using Daffy for your DAF is that you do not need to worry about capital gains taxes for any assets that you contributed and were sold. This can be a significant advantage, especially for long-term investments.
For example, if you donate an investment that you have held more than a year to a qualified public charity, the IRS considers the donation value to be the fair market value of the asset at the time, not the value you paid for it. If you itemize your tax deductions, this amount can be substantial.
In conclusion, Daffy provides a simple, tax-efficient way to manage your non-cash contributions. Whether you're contributing stocks or cryptocurrencies, Daffy is a great option for managing your DAF and maximizing your tax benefits.
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.