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Appreciated Stock as a Charitable Gift - YouTube
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- Hey everybody, it's
Adam with Wealthquest
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and today, we're gonna talk
about giving appreciated stock
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as a charitable gift.
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Today, we wanted to talk
about giving appreciated stock
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as a charitable gift.
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I think you guys have heard,
over the past couple weeks,
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us really talking about giving
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and this mindset of being generous
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and there's really sort of a technical way
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and an efficient way to give.
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And so, when we're always
talking with our clients,
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we always ask not only are you giving
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and are you charitably inclined,
but how are you doing that?
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Is it coming from cash or is
it coming from something else?
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And so, really this concept
of giving appreciated stock
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is a very cool one because
it's a very big win
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for the client on the tax side,
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but it's also a big win for the charity.
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Really digging back into it
and kinda thinking about it,
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an appreciated stock is just a mutual fund
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or an asset that you have
that has grown over time.
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There's some appreciation to it
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and you have yet to realize the gains.
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You have not paid any tax on the gains.
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Now, what you can do with
this is you can cash it out
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and realize those taxes
and put that extra money
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in your pocket, but what you also can do
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is you can take that
mutual fund or that asset
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or whatever it is and give
it directly to a charity.
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How this works and how it
kinda makes it fun, really,
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is instead of just taking
a dollar out of your pocket
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and giving it to the charity,
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let's say you take this
mutual fund, for instance,
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this appreciated mutual fund,
and give it to the charity,
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it might've cost you 50 cents,
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so you take an investment
that was 50 cents
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and grew to a dollar and you
give that to the charity.
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Well, it only cost you 50 cents
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and you get to get out of the
gain that was in that fund
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that you would've ordinarily
had to pay taxes on.
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Really what you're doing,
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it's a little bit of a double whammy,
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you're saving on the tax piece
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and it costs you less
to give to the charity.
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It's a really great tool to use.
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Now, let's say part of your overall plan
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was to hold that asset long term,
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you can take that same
dollar you were gonna give
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to the charity and just re-buy that asset
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and you're resetting your
cost basis at the same time.
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Again, some of the big points here
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is you get to get out of the capital gain
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or the appreciation that you
would've had to pay tax on,
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it's leveraged up a little bit
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because it took you less money
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than you would've ordinarily
used to give to the charity,
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and if you wanna hold it long term,
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you can reset the cost basis on that.
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Now, there's a few
different ways to do this
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and I hope you tuned in to David's video
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because he was talking a lot
about donor advised funds
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and you can really use
this appreciated stock
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to fund a donor advised fund,
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which also creates all kinds of leverage
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and is very fun to talk about
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with the legacy and other tools.
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By the way, charities love this.
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You can give anything to
'em and they will be excited
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to hold any of these assets
other than cash, as well.
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Really, next time you're
thinking about giving,
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be mindful in how you're
actually doing the giving
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because there are very efficient ways
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to give in the process.
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