Laura Kuntz, CPA/PFS, MBT, was interviewed by TrustWorthy, a Raymond James publication that is shared with 7,800 financial advisors. A reprint of the interview follows:
You can tell a lot about a person by their tax returns. That’s where Laura Kuntz, a financial advisor in Edina, Minn., finds clues about her clients’ charitable giving during a yearly review. “If they’re giving $2,000 a year or more of cash in charitable donations and have appreciated, long-term gain securities, they might be a very good candidate for a donor advised fund.”
As a former CPA with a master’s degree in business taxation, she knows the value of using a donor advised fund (DAF) to help the charitably inclined benefit from their donations. Since the passage of tax cuts in December 2017 that increased the standard deduction, it’s much harder to realize the benefit of a charitable tax deduction – but DAFs offer a solution. You can front-load several years’ worth of donations into one, and if the amount exceeds the standard deduction, you can immediately claim a tax-deductible charitable contribution.
Laura also explains to clients that if they give appreciated stock via a DAF, its capital gains won’t be taxed. “It adds a lot of quantifiable value to a client’s situation,” she said. “What we can then report back to the client in our regular meetings is, “This has saved you [approximately] X amount of capital gains tax or X amount of incremental tax benefit.”
Laura herself uses a Raymond James DAF. “I really like it,” she says. “[In 2017] My husband and I prefunded about four years of our annual giving because in that year charitable deductions were completely deductible to us, plus the markets were high and we had big, unrealized long-term gains.”
It’s a tax-savvy move that saves time as well. “A donor advised fund can be a marvelous way to negotiate [between spouses/partners] just once a year the amount of money you’re going to put aside for charity.”
Laurel Wealth Planning LLC is an independent, fiduciary firm, which custodies through Raymond James Financial as well as other national firms. We do not practice accountancy; therefore, work closely with your CPA to evaluate and tax planning and charitable strategies.