[Cody]

Should you stop giving cash to qualified charities?
Susan and Steve Sampleton donate $1,000/month in cash to their church.

However, with an AGI of $180,000 and their standard deduction of $30,000 in 2025, they can’t itemize their deductions beyond their state and local taxes of $10,000.

But WAIT!
When Apple released the first iPhone in 2007, Susan and Steve bought $1,000 worth of Apple stock in their taxable brokerage account rather than buying the phone.
Fast forward to 2025 -> their shares are worth $48,000 with $47,000 in unrealized capital gains.

They’re eager to sell the stock and diversify their investment portfolio.

Instead of selling the stock (which would trigger a $7,050 tax bill at a 15% long-term capital gains rate), they donate it directly to a donor-advised fund (DAF) and continue their $1,000/month gifts from there.

Beyond eliminating future realized capital gains, they can now itemize deductions, reducing their federal income tax liability by over $6,000 this year.

That’s a total benefit of over 25 cents per dollar given!

They plan to repeat this strategy every 5 years, claiming the standard deduction in between.

You may have a similar opportunity if you own appreciated securities within a taxable brokerage account!

[Tom]

Great plan. But while I’ll happily take any tax deduction I legally can, I give because I want to give.

[Phil]

Make sure your peeps are taking advantage of QCDs as well.

[Jin]

I don’t think I’ll ever have enough deductions to justify foregoing the standard deduction

[Kristin]

Thanks for the very clear explanation. Do you have any information on setting up the DAF? who do you contact?

What are the costs?

[Johnny]

I implemented this using gains in my taxable brokerage account for the first time last year. I should be able to use the DAF for about 3 years and then I’ll replenish it.

Itemized and got a bigger tax refund. Invested the cash instead.

It’s a great strategy!

[Hardy]

Liquidated half my Tesla yesterday into DAF to do this (sold the other half and put into VTI).

[Yiyin]

we set up a daf a few years ago and have been doing this, taking the standard deduction every other year.

Coincidentally also been selling our very old Apple stock to diversify!

[Author]

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