When you sell a stock and make a profit, you are liable to pay capital gains tax. The amount of tax you pay depends on how long you held the stock and the amount of profit you made. If you held the stock for less than a year, the gain is considered short-term and is taxed at your ordinary income tax rate. If you held the stock for more than a year, the gain is considered long-term and is taxed at a lower rate. However, there is a way to avoid paying capital gains tax: by donating your stock to charity. This is where Daffy comes in as an excellent option for a Donor-Advised Fund (DAF). When you donate stock to a charity through Daffy, the IRS considers the donation value to be the fair market value of the asset at the time of donation, not the value you paid for it. If you itemize your tax deductions, this can result in substantial savings. For example, let's say a couple earning $250,000 purchased 500 shares of Apple stock in January 2021 for $130 per share, a total purchase of $65,000, and then decided to sell it in February 2022 for $175 per share, or a total of $87,500. In a state like California, this couple might be in a 15% federal tax bracket for long-term capital gains. If they sold the stock, they would owe $3,375 in federal taxes. But what if they donated the stock to a charity through Daffy instead? They would avoid the capital gains tax and could deduct the full market value of the stock at the time of donation from their taxable income. This could result in significant tax savings, while also supporting a cause they care about. In conclusion, if you're considering selling a stock and taking the capital gain, consider donating the stock through Daffy instead. It's a win-win situation: you save on taxes and support your favorite charities.