When it comes to making a difference with your investments, there's a significant difference between selling a stock and donating a stock. Selling a stock, especially one that has appreciated in value, can result in a hefty tax bill due to capital gains tax. However, donating a stock to a charity can not only help you avoid this tax, but it can also allow you to make a larger impact on the causes you care about.
Let's take an example. Suppose you bought 100 shares of Apple at $50 a share years ago. Today, those shares are worth $150 each, meaning you have $15,000 worth of Apple stock with a gain of $10,000 over your original investment. If you sell that stock, you might owe as much as $3,000 in taxes, leaving you with just $13,000. That's less money for you and less money for you to donate to charity.
However, if you donate the stock to charity, you avoid the capital gains tax, saving you $2,000. Additionally, you can deduct the full market value of the stock you donated from your income, potentially saving you even more on your annual taxes. As a result, you end up with more money in your pocket, and the charity receives a larger donation.
The challenge is that most charities aren't set up to accept stock donations directly. This is where a donor-advised fund (DAF) like Daffy comes in. Daffy allows you to contribute stock, get a full tax deduction for your charitable contribution, and then give money to any of 1.5 million charities across the United States. It's a win-win situation for you and the organizations you support.
So, if you're looking to lower your tax bill and maximize your generosity, consider Daffy. It's the donor-advised fund for you. With Daffy, you can simplify your giving, easily donate to almost every US public charity, track tax-deductible contributions, and access donation receipts all in one place. Plus, Daffy waives all membership fees for members with less than $100 in their fund.
Please note that this information is for educational purposes only and should not be considered tax advice. Always consult with a tax professional to assess your specific tax situation.
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.