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19 December 2016


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OR, you can create a Donor Advised Fund (DAF) that can be set up with as little as $1,000 and take a federal income tax deduction up to 50% of adjusted gross income for cash contributions and up to 30% of adjusted gross income for appreciated securities. Further, by transferring assets such as real estate or limited partnership interests to a DAF, donors can avoid capital gains taxes and receive an immediate, fair-market-value tax deduction.
Most important, the tax benefits donors receive from DAFs are far more substantial than if they turn over the same contribution to a foundation, especially when it comes to donations of real estate, hedge-fund interests, and other complex assets.
1. Donors get the emotional satisfaction of setting aside funds for charity, as well as a full tax deduction.
2. Donors do not have to distribute any money from the accounts until they are ready to decide on a worthy charity, a privilege that can extend across multiple generations.
3. Donors can even unload complex assets, like interests in closely held businesses, into their funds to escape capital-gains taxes.
4. Donors could use the funds to accommodate a large bonus or inheritance by taking some additional time to decide which charities to benefit.
5. Clients can make grants during their lifetime or over successive generations.

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