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Charitable Contributions | Gifting Stocks in Place of Cash, Tithing, Offering, & Philanthropy - YouTube
Channel: Exencial Wealth Advisors
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[Inaudible] hi.
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Everyone. This is Jared Snyder
with Exentia wealth advisors.
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I'm a partner and senior
advisor here at essential,
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and I thought we could talk a little
bit today about charitable giving.
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We get questions all the time from clients
about what's the best way to support
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the organizations that are
really important to them
that are fulfilling really
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great purposes, really great missions.
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And there are some really
great ways to accomplish that.
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And there are also some ways to give to
charities that also not only benefit the
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charity, but can help you
on your taxes, you know, to,
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to end up with a better tax position
for you as the person giving those
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financial resources to the charity. So
when we're looking at charitable giving,
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what we try to help our clients do is
to figure out the most tax efficient way
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to do that. Typically, most people, when
they think about giving to charities,
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they think about giving cash and cash
is probably the most commonly, uh,
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gifted asset to charities. Sometimes
it can make sense to give cash,
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but there are also other types of assets
that you can give to charities that can
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actually help you whenever you're
looking to reduce your tax bill.
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So one of the things that you can
do is give appreciated securities.
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Let's say you've built up some, uh,
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some investments in a
non-retirement account. You've
got some individual stocks,
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maybe some apple stock,
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maybe you have some mutual funds
or some ETFs that have grown,
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and that you have some
unrealized gains in,
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let's say you invested a hundred
thousand dollars into apple stock.
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And that a hundred thousand dollars has
turned into $200,000 in apple shares.
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So you have a hundred thousand
dollars of unrealized gains.
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Whenever you're wanting to do some
gifting, instead of gifting cash,
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you can actually gift those securities.
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You can gift those shares of apple.
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And then all of that growth that you've
had that has been unrealized because you
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haven't sold those shares yet you can
gift a number of shares that would
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equal the amount of financial value
that you're wanting to, you know,
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to give to that charity. And then
two really cool things happen.
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One, the charity gets
the benefit of that gift.
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So they're receiving the financial
value that you wanted to give and to you
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avoid having to pay tax on
the unrealized portion of
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that gain. So you avoid that capital
gains tax, which is a really cool thing,
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obviously from a tax standpoint.
So that's one really cool,
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powerful thing you can do with charitable
giving another tool that's out there
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for you to think about
is a donor advised fund.
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And all a donor advised fund
is, is a charity of itself.
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So it's actually a 5 0 1 C3,
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but it's really a conduit for
giving to other charities.
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So whenever you give a securities,
it was appreciated securities,
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individual mutual funds, ETFs.
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You give those to the donor advised fund,
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you get the charitable deduction,
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you get the tax benefit of that
gift in whatever year that you make,
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that donor advised fund gift.
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And then the donor advised fund receives
those shares. They'll sell the shares.
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It's not a taxable event for
them because they're a charity.
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So they sell the shares, they
have the cash sitting there,
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and then you direct the donor
advised fund for which charitable
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organizations you want
to receive the benefit.
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And you can spread that out over a
number of weeks, months, years, really,
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whatever timeline you want to do that.
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And so it's a really great
way of organizing all your
charitable giving in one
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place. It's a great way of
avoiding the tax on, you know, the,
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the unrealized gain that you might have
on some of those winners in your, uh,
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in your investment account. Um,
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then another thing that's really cool
to do with that is to look at a year,
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maybe it's this year,
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maybe it's a future year where you have
a really good sense that your income is
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going to be perhaps significantly
higher in that year.
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One thing that can make
sense is to bundle, you know,
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maybe multiple years of your charitable
giving into one year and use a
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donor advised fund to facilitate that.
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So let's say you give $25,000 a year
to charities, and let's say, you know,
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that this year, you know,
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you're going to have a liquidity event
something's going to happen. And your,
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your taxable income is going to
be meaningfully higher. Well,
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you get more bang for your
buck in a higher tax year,
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whenever you do more charitable giving.
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And so maybe you front load future
year's giving to that year. You know,
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you say, okay, well, if
I'm giving $25,000 a year,
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let's give four or five years of
giving to a donor advised fund.
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So maybe you give a hundred thousand,
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$125,000 to that donor advised
fund in appreciated stock.
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And then you can spread out the giving
to that charitable organization over that
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four or five-year period. You don't
have to give it all in one year.
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It's a really,
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really great way of being able to help
the charity that you want to help out and
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also help yourself out with some tax
planning that maybe you hadn't thought of
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before. I hope that's really helpful
if there are any other ideas,
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things that are on your mind that
you'd love to reach out and ask us.
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We're always here. We're always
available to be a sounding board for you.
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So if you're thinking about
your charitable contributions
for this year or a
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future year, just trying to put
all that together, reach out to us,
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give us a call. We're glad to help.
Thanks. Hope you have a great day.
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[Inaudible].
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