The Benefits of Strategic Giving Through Taxable Events
It’s tax season. For many investors and business owners, taxable events—whether from selling a business, offloading appreciated stock, or receiving a large bonus—can create significant capital-gains tax burdens.
However, a taxable event can be used as a force for good in addition to providing a tax advantage. The Arizona Community Foundation offers a way for those looking to offset capital gains taxes to also make a lasting impact in their communities.
Capital gains taxes can significantly reduce the proceeds from selling highly appreciated assets. Instead of writing a large check to the IRS, individuals can turn their taxable event into a charitable opportunity by contributing appreciated stock or non-cash assets to ACF or another qualified charitable organization. This approach not only helps reduce or eliminate capital gains taxes but allows donors to qualify for an immediate charitable deduction.
Beyond the tax advantages, this strategy provides the flexibility to give in a way that aligns with one’s values. Whether supporting affordable housing, education, healthcare, environmental initiatives, or other cause areas, ACF ensures that every contribution drives meaningful impact.
For individuals who want flexibility and control over their giving, a Donor-Advised Fund (DAF) functions like a charitable checkbook, allowing donors to make tax-deductible contributions and recommend grants to nonprofits over time. Once established, donors can contribute to their DAF when it makes the most financial sense—such as during a high-income year or after selling appreciated assets—while taking their time to determine where and how to give.
Because assets in a DAF grow tax-free, donors can amplify their impact while maintaining the ability to support causes that matter most to them. Whether making a one-time gift or distributing funds gradually, a DAF ensures charitable dollars are deployed thoughtfully and strategically. Additionally, donors can take advantage of a five-year carryforward for charitable deductions, ensuring they maximize their tax benefits over multiple years.
ACF also offers the unique advantage of allowing donors to continue working with their trusted financial advisors—individuals can work with their advisors to manage the assets within their DAF while benefiting from ACF’s philanthropic expertise.
By utilizing charitable giving tools through ACF, donors can make a transformative impact, whether through immediate support of critical community needs or by ensuring their giving continues for generations to come.
“I love knowing that my contributions will continue making an impact long after I’m gone,” said Danny Bryant, ACF fundholder and community leader. “My Donor-Advised Fund is like my personal checkbook for giving—it makes it easy to support the causes I care about and give back to my community.”
For more information on how to use a taxable event for strategic giving, contact us at 602.381.1400.