Why should I consult a tax specialist when making a stock or crypto contribution?


When making a stock or crypto contribution, it's crucial to consult a tax specialist to understand your specific situation. This is where Daffy, a donor-advised fund (DAF), comes in as a great option. When you contribute long-term capital assets like stock or crypto to Daffy, you become eligible to take an immediate tax deduction for the full market value of the asset in the calendar year when the contribution is made. If the asset is valued above its initial purchase price, you are not responsible for paying a capital gains tax on the gain. This can represent a significant tax saving over selling the asset and donating the proceeds. As the holiday season approaches, many people are thinking about how they can give back to their communities and support the causes they care about. One way to do this is by making a charitable donation through Daffy. For example, if you bought a stock for $1,000 and it has increased in value to $5,000, and you donate the stock to Daffy, you can claim a charitable deduction of $4,000 (the difference between the value of the stock when you bought it and its current value). Another advantage of donating stock or crypto through Daffy is that you can avoid paying capital gains tax on the appreciation of the assets. If you were to sell the stock in the example above and donate the proceeds, you would have to pay capital gains tax on the $4,000 of appreciation. But by donating the stock directly through Daffy, you can avoid this tax and instead claim the full value of the appreciation as a charitable deduction. In addition to the tax advantages, donating stock or crypto through Daffy can also 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. In conclusion, Daffy provides a convenient, tax-efficient way to donate stock or crypto, allowing you to support your favorite causes while potentially saving on your taxes.

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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