Another option to consider if one donates to a charity but at a lower dollar amount than the examples shown, is to use a traditional IRA for the source. Instead of using money that has already been taxed from a brokerage account, do a direct IRA to charity donation with money that has not been taxed and won’t be taxed as a distribution or Roth conversion. No, you can’t use it as deduction but no taxes are paid on this, “distribution.” Another way to look at it is you can donate to a charity of your choice using pretax money.
Today is #DAFday and it is an awesome day to donate from your donor advised funds. Lots of these places talk about giving hundreds of thousand and for small nonprofits like us, with a donation of 1 Apple stock, we can provide the meals for a student during the whole Youth Bike Repair Program where they learn to fix a bike and they get to keep the bike at the end of the program!
If one spouse has high earnings the other spouse has an inherited IRA , the earned income can be used for DAF while substituting earned income for living expenses with the inherited IRA forced income . Than use alternate years with itemizing one year and standard deduction next few years
Just put $25000 into a DAF every other year. That makes all those other items tax deductable in those years. Then take standard deduction on off years and draw from DAF for donations.
Ages 63 and 64 here and still itemizing each year. That's fairly unusual, if I understand things correctly. Expect to still be itemizing for several more years yet.
Great strategy on the Roth conversion as this is one of my goals. You still get hit with large IRMMA penalty as your AGI is not adjusted by the deduction. But still a very good strategy if you want to start fund a Roth. My question is: if I contribute $100K to a Donor Fund and take the state deduction of $10K, my deduction is $110,000 vs. the normal $33,200 (MFJ over 65). Can you validate this? Can I still deduct HC premiums from my Business Income. Does this affect anything other than the standard deduction? Thank you, awesome video.
Another huge benefit is that you get to donate the appreciation that takes place in your account assuming there is appreciation.I have mine in S and P index ETF and Technology ETF, I have had a terrible experience with a CPA in New York who runs a DAF but he is not transparent.I complained to the NYAG's office but they keep saying that they cannot subpoena my account.Can you refer me to any other agency? Could I contact someone in newspaper to bring this to other donor's attention?Thank you!
Does a Donor Advissed fund make much sense after you reach 701/2 and can make QCDs from your IRA? Then you can still take the standard deductin and donate from your IRA avoiding tax on that distribution going yo charity.
It could still make sense if you have appreciated stock to donate or if you want to give more than the QCD limits. But for many people a QCD accomplishes what they need.
Unless I'm not understanding something... one scenario that seems to be missed here (for someone who tithes every year for example), is to open one of these funds in the year one sells a house (i.e. downsized) in which there was a large capital gain that exceeds the exclusion. Couldn't one then offset a lot of that by putting 50% of the cash windfall into a donor-advised fund? Thanks!
Good video. But you are incorrect: once the funds are given to a DAF you do NOT retain full control of the funds. While many DAFs distribute funds as you request, they are under no legal obligation to do so. Essentially, what happens when giving to a DAF is you give the money to another entity and request that they distribute it in certain ways. Legally, they can choose to NOT do so and legally they can choose WHEN to do so. As in they could chose to not distribute until long after when you request it get donated (it could be years). Thus they maintain control over funds not you. This is a common mistake people make when talking about DAFs (you aren’t the only one who makes this mistake) but it is an important detail that needs to be gotten right when talking about DAFs.
This is the best explanation of the pros and cons of a DAF. Thanks.
Thank you for such a clear explanation of how this works. I'm going to look more into this as our W2 jobs puts us at a moderate tax bracket.
Another option to consider if one donates to a charity but at a lower dollar amount than the examples shown, is to use a traditional IRA for the source. Instead of using money that has already been taxed from a brokerage account, do a direct IRA to charity donation with money that has not been taxed and won’t be taxed as a distribution or Roth conversion. No, you can’t use it as deduction but no taxes are paid on this, “distribution.” Another way to look at it is you can donate to a charity of your choice using pretax money.
Thank you for the insight!
@@RootFP I think 👆this would also make a good video.
That’s the answer I was looking for thank you
My understanding is that unless your are over age 70 any donation from an IRA will still be taxed as a distribution, correct?
@@JordonRichardyeah, I don't think you can do this until you are 70 1/2.
FINALLY A VIDEO THAT EXPLAINS IT ALL!
This is a great idea that my financial advisor never explained. Thanks James.
Thank You 💚💚💚💚🦅🦅🦅🦅
Very helpful video! Thank you for explaining things so clearly!
Great presentation. Thank you
Thanks for watching!
Today is #DAFday and it is an awesome day to donate from your donor advised funds. Lots of these places talk about giving hundreds of thousand and for small nonprofits like us, with a donation of 1 Apple stock, we can provide the meals for a student during the whole Youth Bike Repair Program where they learn to fix a bike and they get to keep the bike at the end of the program!
Great content, very helpful
Very well explained! Great job!
Glad you liked it!
Great video, thanks for sharing!
You are most welcome!
Great video! Very helpful.
How does one open a donor advised fund? Do we just call our Schwab broker?
If one spouse has high earnings the other spouse has an inherited IRA , the earned income can be used for DAF while substituting earned income for living expenses with the inherited IRA forced income . Than use alternate years with itemizing one year and standard deduction next few years
Just put $25000 into a DAF every other year. That makes all those other items tax deductable in those years. Then take standard deduction on off years and draw from DAF for donations.
Ages 63 and 64 here and still itemizing each year. That's fairly unusual, if I understand things correctly. Expect to still be itemizing for several more years yet.
Great strategy on the Roth conversion as this is one of my goals. You still get hit with large IRMMA penalty as your AGI is not adjusted by the deduction. But still a very good strategy if you want to start fund a Roth. My question is: if I contribute $100K to a Donor Fund and take the state deduction of $10K, my deduction is $110,000 vs. the normal $33,200 (MFJ over 65). Can you validate this? Can I still deduct HC premiums from my Business Income. Does this affect anything other than the standard deduction? Thank you, awesome video.
Another huge benefit is that you get to donate the appreciation that takes place in your account assuming there is appreciation.I have mine in S and P index ETF and Technology ETF, I have had a terrible experience with a CPA in New York who runs a DAF but he is not transparent.I complained to the NYAG's office but they keep saying that they cannot subpoena my account.Can you refer me to any other agency? Could I contact someone in newspaper to bring this to other donor's attention?Thank you!
Does a Donor Advissed fund make much sense after you reach 701/2 and can make QCDs from your IRA? Then you can still take the standard deductin and donate from your IRA avoiding tax on that distribution going yo charity.
It could still make sense if you have appreciated stock to donate or if you want to give more than the QCD limits. But for many people a QCD accomplishes what they need.
Is there a IRA to ROTH Conversion Offset for the amount you put into the DAF?
Unless I'm not understanding something... one scenario that seems to be missed here (for someone who tithes every year for example), is to open one of these funds in the year one sells a house (i.e. downsized) in which there was a large capital gain that exceeds the exclusion. Couldn't one then offset a lot of that by putting 50% of the cash windfall into a donor-advised fund? Thanks!
How is a DAF different from a CRuT. Can you put highly appreciated real estate into a DAF
How is a DAF set up?
Please use a better example
Who has a $100k to start
Many give $12000 a year to a church
How do you start this process when you don’t itemize
I'm leaving my Traditional IRA to charity.
Good video. But you are incorrect: once the funds are given to a DAF you do NOT retain full control of the funds. While many DAFs distribute funds as you request, they are under no legal obligation to do so.
Essentially, what happens when giving to a DAF is you give the money to another entity and request that they distribute it in certain ways. Legally, they can choose to NOT do so and legally they can choose WHEN to do so. As in they could chose to not distribute until long after when you request it get donated (it could be years). Thus they maintain control over funds not you.
This is a common mistake people make when talking about DAFs (you aren’t the only one who makes this mistake) but it is an important detail that needs to be gotten right when talking about DAFs.
👍🏻👏👏👏🥰🥰💰💰💰