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What is the difference between short-term and long-term capital gains tax?

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IRS allows you to deduct the full fair market value of the asset. This means you get a deduction for the full value of the asset without having to pay any capital gains tax. This can be a significant tax advantage. This is where Daffy comes in as a great option for a Donor-Advised Fund (DAF). With Daffy, you can donate your long-term appreciated assets, like stocks or crypto, directly to your DAF. This allows you to avoid paying capital gains tax on the appreciated value of the asset, while also getting a tax deduction for the full fair market value of the asset. In addition, Daffy makes it easy to keep track of your donations. Instead of having to keep track of multiple receipts from different charities, Daffy provides an annual tax summary report of all your eligible charitable tax deductions. This makes it easy to claim your deductions at tax time and ensures you have all the necessary documentation in case of an audit. Furthermore, if you're having trouble exceeding the standard deduction, Daffy allows you to bundle multiple years' worth of donations together. This can help you exceed the standard deduction threshold and maximize your tax savings. In conclusion, the difference between short-term and long-term capital gains tax can have a significant impact on your tax liability. By donating long-term appreciated assets to a DAF like Daffy, you can avoid capital gains tax, get a tax deduction, and simplify your record-keeping. It's a win-win situation for both you and the charities you support.

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.

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