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Tax advantages of a DAF

Contributions made to a Donor Advised Fund are irrevocable and fully deductible as of the date it leaves your control. The extent of your deduction will depend on the type of asset being contributed and your particular tax situation. Please consult your legal and tax advisors for more information.

Cash Contributions

Cash contributions are eligible for a federal income tax deduction, up to a maximum of 505 of your adjusted gross income in the tax year in which the contribution is made. If your contribution exceeds this limit, you may carry forward the deduction up to five (5) years.

Publicly traded Securities

For publicly traded securities held for more than one year, the amount of the deduction is the mean value of the high and low prices of the security on the date of the contribution. You may generally deduct up to 30% of your adjusted gross income for contributions of appreciated securities held more than one year.

For securities held for one year or less, the allowable deduction will be based on either your cost basis or fair market value, whichever is lower.

If your contribution of securities is greater than 30% of your adjusted gross income, you may carry the deduction up to five (5) years.

Estate Taxes

All contributions to a Donor Advised Fund are separate from your estate and therefore are not subject to either estate taxes or probate.

Account income

Any income that may accrue to the account from investment growth is exempt from taxes but is not deductible.

Capital Gains

One of the most rewarding benefits of Donor Advised Funds is the ability to contribute appreciated securities without incurring any capital gains tax liability.

 

The information contained on this site is for educational purposes only. It is not intended to be professional tax or legal advice; consult the appropriate professional regarding your specific situations.

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