I have an unexpected capital gains event. My former company is being sold for cash and I have a lot of shares. I thought I would open a Donor Advised Fund (DAF) and contribute some shares before the sale closes, so I don't have to pay capital gains on those shares. I would also get a tax deduction for the donation. Other than this capital gain, my income from pension and Social Security is about $100k.
I found this nifty website to run various donation scenarios to determine how much I'd like to donate. https://smartasset.com/investing/capita ... XxsKzJJ7Ju However, it will not let me enter itemized deductions greater than my Annual Income, which it defines as the income separate from my capital gains, which is $100k.
Is it true that if I donated, say, $150k, I could only take itemized deductions of $100k, even if I still had capital gains of about $300k above that amount?
Offsetting cg event with charitable donation - deduction limit?
Offsetting cg event with charitable donation - deduction limit?
Last edited by jennrod12 on Sat Jan 22, 2022 4:45 pm, edited 1 time in total.
Re: Offsetting cg event with charitable donation - deduction limit?
Deducting appreciated shares to DAF is limited to 30% of your AGI.
Keep in mind if you are donating shares, the shares that you are donating do not count toward your income (this is precisely how you are avoiding a capital gains tax, the unrealized capital gain never goes into your income in the first place).
Keep in mind if you are donating shares, the shares that you are donating do not count toward your income (this is precisely how you are avoiding a capital gains tax, the unrealized capital gain never goes into your income in the first place).