Author Topic: Trump-Republican tax plan, Bad for large families  (Read 49529 times)

Offline Deal Guy

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Re: Trump-Republican tax plan bad for large families
« Reply #450 on: December 12, 2017, 11:44:46 PM »
thanks, I'm looking into setting up and funding a DAF based on that assumption.
Can you elaborate, why you would look to set up a Donor Advised Fund based on the 24,000? What will you gain whether its 12,000 or 24,000?

Offline yitzf

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Re: Trump-Republican tax plan bad for large families
« Reply #451 on: December 12, 2017, 11:49:25 PM »
Can you elaborate, why you would look to set up a Donor Advised Fund based on the 24,000? What will you gain whether its 12,000 or 24,000?

I assume he means that due to the 24k floor and reduced deductions he wont itemize in 2018 so he wants to "pre pay" his 2018 charitable contributions in 2017.

Offline Mikeoracle

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Re: Trump-Republican tax plan bad for large families
« Reply #452 on: December 12, 2017, 11:56:13 PM »
Can you elaborate, why you would look to set up a Donor Advised Fund based on the 24,000? What will you gain whether its 12,000 or 24,000?
simple, my itemized deductions not including charity= 12-14k, so next year I would have to give 12k+ in charity in order to start capturing any tax benefit on my charity.
This year I'm still itemizing so if I load an additional year or so worth of charity to a DAF I would get the benefit right back in a few months at tax time (25% back).

Am I missing something?

Offline Mikeoracle

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Re: Trump-Republican tax plan bad for large families
« Reply #453 on: December 12, 2017, 11:57:16 PM »
I assume he means that due to the 24k floor and reduced deductions he wont itemize in 2018 so he wants to "pre pay" his 2018 charitable contributions in 2017.
exactly. It's almost a use it or lose it situation, and I'm thinking of loading more than a years worth...

Offline Mikeoracle

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Re: Trump-Republican tax plan bad for large families
« Reply #454 on: December 13, 2017, 12:02:20 AM »
For anyone else who is interested, especially Lakewood residents, I found a good option with https://thedonorsfund.org , a few people recommended them to me.
They also have an option to setup an account to get"certificates" either printed booklets or blank amounts, so you can easily use them for small amounts like meshulachim etc...

Offline Mikeoracle

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Re: Trump-Republican tax plan bad for large families
« Reply #455 on: December 13, 2017, 12:04:52 AM »
For anyone else who is interested, especially Lakewood residents, I found a good option with https://thedonorsfund.org , a few people recommended them to me.
They also have an option to setup an account to get"certificates" either printed booklets or blank amounts, so you can easily use them for small amounts like meshulachim etc...
They work with anyone, but I think around Lakewood everyone is familiar with their certificates and now how to redeem them, so it's no hassle

Offline Deal Guy

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Re: Trump-Republican tax plan bad for large families
« Reply #456 on: December 13, 2017, 12:33:40 AM »
simple, my itemized deductions not including charity= 12-14k, so next year I would have to give 12k+ in charity in order to start capturing any tax benefit on my charity.
This year I'm still itemizing so if I load an additional year or so worth of charity to a DAF I would get the benefit right back in a few months at tax time (25% back).

Am I missing something?
Sounds right.
So suppose someone gives 10k, you will save 2500 if you are in the 25% bracket.

How does it work? Lets say you give them 10k. Which charities can you then give the 10k to?
What fee do they charge for you giving them 10k to distribute? (If anything they should pay you, since they can invest your money until you tell them where to send it.)

Offline yitzf

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Re: Trump-Republican tax plan bad for large families
« Reply #457 on: December 13, 2017, 12:34:31 AM »
For anyone else who is interested, especially Lakewood residents, I found a good option with https://thedonorsfund.org , a few people recommended them to me.
They also have an option to setup an account to get"certificates" either printed booklets or blank amounts, so you can easily use them for small amounts like meshulachim etc...

So the printed booklets have a 3% or 4% fee for the donor, but do they they give the full amount to the meshulach when he redeems it, or do they take a cut there also?

Offline ExGingi

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Re: Trump-Republican tax plan bad for large families
« Reply #458 on: December 13, 2017, 01:05:09 AM »
So the printed booklets have a 3% or 4% fee for the donor, but do they they give the full amount to the meshulach when he redeems it, or do they take a cut there also?
Haven't looked at what other funds charge, but they seem to be charging 50bps per month on first $500k in assets (and lower on additional assets), and then 3%-4% if you use the certificates. Sounds quite lucrative.
I've been waiting over 5 years with bated breath for someone to say that!
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Offline gozalim

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Re: Trump-Republican tax plan bad for large families
« Reply #459 on: December 13, 2017, 01:28:06 AM »
Haven't looked at what other funds charge, but they seem to be charging 50bps per month on first $500k in assets (and lower on additional assets), and then 3%-4% if you use the certificates. Sounds quite lucrative.
won't some banks let you create your own DAF for a reasonable minimum deposit without all those cuts?

Offline yitzf

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Re: Trump-Republican tax plan bad for large families
« Reply #460 on: December 13, 2017, 01:29:43 AM »
won't some banks let you create your own DAF for a reasonable minimum deposit without all those cuts?

Fidelity and Vanguard have them but charge 60bps, and no check writing to meshulachim.

Offline Mikeoracle

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Re: Trump-Republican tax plan bad for large families
« Reply #461 on: December 13, 2017, 06:59:28 AM »
They are the only ones I found that have the certificate program. I'm looking into the premium account with 3% fee. The way it works is that they charge that fee at the time of redemption and you can decide if you pay the full 3 or split it 1-2 or 2-1 with the charity/meshulach.
« Last Edit: December 13, 2017, 07:14:06 AM by Mikeoracle »

Offline Mikeoracle

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Re: Trump-Republican tax plan bad for large families
« Reply #462 on: December 13, 2017, 07:12:26 AM »
 
Sounds right.
So suppose someone gives 10k, you will save 2500 if you are in the 25% bracket.

How does it work? Lets say you give them 10k. Which charities can you then give the 10k to?
What fee do they charge for you giving them 10k to distribute? (If anything they should pay you, since they can invest your money until you tell them where to send it.)
for the DAF account you let them know where to send funds to any IRS approved charity.
I think the certificate accounts are just another "method of advising" them how to distribute your funds.
Since the original donation is considered irrevocable and you don't really own the funds anymore, it is referred to as "advising".

Offline Mikeoracle

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Re: Trump-Republican tax plan bad for large families
« Reply #463 on: December 13, 2017, 02:13:25 PM »
There is another great strategy if you want to fund a DAF. You are allowed to donate stocks, and the donation is valued at the current market rate. This actually results in a double benefit because you dont pay any cap gains that you may have had.
For example, say you bought $5k AAPL a year ago and it is now worth $10k, when you fund the DAF with these shares you save on the $5k cap gains, on top of the $10k charity deduction you are getting. A variation of this strategy would be, even if you wanted to retain your AAPL position, you can essentially donate the shares, purchase new shares at the same time to replace them and now your position has a new higher cost basis, for your eventual sale thereby saving you on future cap gains.
I am thinking of doing this with any stock position that I currently have high percentage gains, in order to reset the cost basis and maximize the charity deduction at the same time.
I contacted The Donors Fund and they confirmed they can accept stocks as long as they arent penny stocks or unlisted stocks, but prefer it to be valued at least $10k but may be negotiable.

Offline Mikeoracle

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Re: Trump-Republican tax plan bad for large families
« Reply #464 on: December 13, 2017, 06:02:41 PM »
Sorry I forgot to point out one important point, the below would only work with long term cap gains and not for short term cap gains (stocks must have been purchased prior to 2017).