One important aspect to consider is the option of donating appreciated assets, such as stocks or real estate, to establish a donor advised fund (DAFs).

Let's say you have an investment in stocks that has significantly appreciated over the years. If you were to sell the stocks, you would incur capital gains taxes on the appreciated value. However, by instead donating the appreciated stocks to your DAF through your community foundation, you may be able to avoid paying those capital gains taxes altogether. 

By donating the stocks to your DAF, you can receive a tax deduction for the full fair market value of the stocks at the time of the donation. This means that you can support charitable causes, eliminate capital gains taxes, and receive a tax benefit for the donation, all while making a positive impact in your community. This strategy allows you to minimize your tax burden and maximize the value of your charitable contributions.

Another type of donation that can be impacted by capital gains tax is donating real estate or other tangible assets that have increased in value. If you sell a property or another valuable asset for more than your original purchase price, you will typically owe capital gains tax on the appreciation. However, if you donate the property or asset to your community foundation, you may be able to avoid paying those capital gains taxes and receive a tax deduction for the fair market value of the donated property at the time of the donation. This can be another strategic way to support charitable causes while minimizing your tax burden. 

It's important to note that tax laws and regulations regarding charitable donations and capital gains can be complex, so seeking advice from a qualified tax professional or financial advisor is crucial. They can help you understand the potential tax implications and benefits of making donations and develop a strategy that aligns with their overall financial and philanthropic goals. If you need help or have questions about a complex asset you are considering donating, reach out to Cole Eason, VP of Advancement, at 816-912-4182 or eason@thcf.org for further guidance.