Have you thought about how your charitable giving can lighten your tax burden?

When we initially met our client, we reviewed all of his assets and noticed he had a large amount of highly appreciated stock. He was motivated to sell and was interested to learn about all the possible options. He quickly realized that selling all of his appreciated stock in one year would result in a substantial tax bill from the unrealized capital gains. So we considered a few other possible solutions that would allow him to sell his stock without incurring a large tax bill. 

As a way to meet this client’s charitable giving goals, we suggested that the client open a Donor Advised Fund. Donor Advised Funds are philanthropic vehicles that allow individuals to make irrevocable contributions to charity.  

With the help of his CPA, we determined the dollar amount that made sense to set aside for philanthropy. By allocating to the Donor Advised Fund, the client was able to claim the entire balance for the year, even though he had planned to donate the value over the next five years, providing him with a sizeable tax deduction. 

 In one year, he sold his appreciated stock, diversified his portfolio, and set-up a formal charitable giving account, effectively putting our client’s stock options to work in a meaningful way and meeting his charitable giving goals.

 

Location

San Francisco, CA

Service(s)
  • Client Goal

    Sell appreciated stock

  • Years with Freestone

    1 year

  • actual

    Diversified his portfolio, received a sizeable tax deduction, and met his charitable giving goals

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