Page 11 - Hobe Sound Reflections - November '24

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Donor-Advised Funds: such as closely held business interests, art or collectibles. one contribution to a DAF and take a larger deduction
A Smart Way To Give You can then decide how to invest the money, possibly in that tax year. And you can claim that deduction, even
following a strategy suggested by the DAF sponsor
though the DAF may distribute funds to charities over
organization you’ve selected. The next step involves several years.
By Sally Sima Stahl choosing which charities to support, how often to provide • Tax-free growth of earnings – Once you contribute
You can find several support (such as once a year) and how much to give an asset to a DAF, any earnings growth is not taxable to
ways to make charitable each time. You’re essentially free to direct the money to you, the DAF or the charitable groups that receive grants
gifts but if you’re looking any charities you like, provided they’re IRS-approved from the DAF.
for a method that can provide charitable organizations. • Avoidance of capital gains taxes – When you donate
multiple tax benefits, along Now, let’s look at the possible tax advantages offered appreciated stocks or other investments – or for that
with an efficient platform by a DAF: matter, virtually any appreciated asset – to a DAF, you can
for giving year after year, • Immediate tax deduction – A few years ago, changes avoid paying the capital gains taxes that would otherwise
you might want to consider in tax laws resulted in a vastly increased standard be due if you were to simply sell the asset and then
a donor-advised fund. deduction, which, in turn, led to far fewer people itemizing donate the proceeds to charitable organizations. Plus, by
Once you open a donor- on their tax returns and having less incentive, at least from receiving the appreciated asset, rather than the proceeds
advised fund (DAF), you a tax standpoint, to contribute to charities. But if you don’t from a sale, the charitable groups can gain more from
can contribute many types of assets, including cash, typically give enough each year to itemize deductions, your contribution. And you can also take a tax deduction
publicly traded stocks, bonds, CDs or non-cash items you could combine several years’ worth of giving into for your donation.
While these potential tax benefits can certainly make a
DAF an attractive method of charitable giving, you should
be aware of some potential tradeoffs. Once you contribute
assets to a DAF, that gift is irrevocable, and you can’t
access the money for any reason other than charitable
giving. Also, your investment options are limited to what’s
available in the DAF program you’ve chosen. And DAFs
can incur administrative costs in addition to the fees
charged on the underlying investments.
You may want to consult with your financial
professional about other potential benefits and tradeoffs
of DAFs and whether a DAF can help you with your
charitable giving goals. Also, different DAF sponsors
offer different features, so you will want to do some
comparisons. And because DAFs can have such
significant implications for your tax situation, you should
consult with your tax professional before taking action.
If a DAF is appropriate for your situation, though,
consider it carefully — it might be a good way to support
your charitable giving efforts for years to come.
This article was written by Edward Jones for use by
your local Edward Jones Financial Advisor, Edward
Jones, Member SIPC.
Edward Jones is a licensed insurance producer in
all states and Washington, D.C., through Edward D.
Jones & Co., L.P., and in California, New Mexico and
Massachusetts through Edward Jones Insurance Agency
of California, L.L.C.; Edward Jones Insurance Agency of
New Mexico, L.L.C.; and Edward Jones Insurance Agency
of Massachusetts, L.L.C.
Edward Jones, its employees and financial advisors
cannot provide tax advice. You should consult your
qualified tax advisor regarding your situation.
Contact us at (561) 748-7600, Sally Sima Stahl, CFP ,
AAMS , 1851 W. Indiantown Road, Ste. 106, Jupiter, FL
®
™
PUT YOUR MIND AT EASE 33458.

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Veteranʼs Day

Monday,

November 11