Daffy allows you to donate your stock directly to a non-profit, saving you from the capital gains tax that would be triggered by selling the security. This means you can donate more to your favorite charities and save on your tax bill at the same time.
For example, if you were a long-term investor in Apple Computer and had purchased shares at $50 a share years ago, and today, Apple is at $150 a share, you would now have $15,000 worth of Apple stock with a gain of $10,000 over your original investment. If you sell that stock, you might have a tax bill of as much as $3,000. But if you donate the stock to charity through Daffy, you never have to pay the capital gains tax, saving you $2,000 right there.
Moreover, when you prepare your income tax return, you can deduct the full market value of the stock you donated, up to 30% of your gross income. That means if you donate $15,000 worth of Apple stock, you can deduct $15,000 off your income. At a 33.3% rate, that means you could deduct up to $5,000 off your annual taxes.
Remember, charities are not-for-profit organizations, so when they sell the stock you donate, they don't owe any capital gains taxes either. So the charities you support get more resources, and you end up with a lighter tax bill. It's a win-win situation.
In conclusion, donating stock to charity through Daffy is a simple and effective way to maximize your impact on the charities you support while minimizing your tax bill. It's a win-win for you and the charities you care about.