Donor-Advised Fund (DAF)
A charitable giving vehicle held by a public charity sponsor that lets a donor make a tax-deductible contribution today and recommend grants to qualifying charities over time.
Detailed Explanation
DAFs combine the immediate-deduction benefit of a lump-sum charitable gift with the flexibility of granting to charities later. Contributions of appreciated long-term stock or other assets are deductible at fair market value (subject to AGI limits) and avoid capital gains tax on the appreciation. Sponsors include Fidelity Charitable, Schwab Charitable, Vanguard Charitable, and most large community foundations. Once contributed, the assets are irrevocably charitable and cannot be returned to the donor.
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Learn about Tax Planning & StrategyRelated Terms
Charitable Bunching
A strategy of concentrating multiple years of charitable contributions into a single tax year to exceed the standard deduction threshold and itemize, then taking the standard deduction in alternating years.
Qualified Charitable Distribution (QCD)
A direct transfer from an IRA to a qualified charity by a taxpayer age 70 and a half or older, satisfying the RMD without inclusion in taxable income.
Itemized Deductions
Specific deductions claimed on Schedule A in lieu of the standard deduction, including state and local tax, mortgage interest, charitable contributions, and medical expenses.
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