New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
WL2034
Posts: 464
Joined: Tue May 21, 2013 10:36 pm

New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by WL2034 » Wed Dec 27, 2017 3:01 pm

Hi everyone, we are trying to optimize our situation with regards to the new tax bill. We are only out of student debt and with a positive net worth for a few years now, so have only been donating to charity relatively recently. We only heard about the Donor Advised Fund last week here on Bogleheads, and now we have only a few days left in 2017 to decide whether to open one or not. Hoping some Bogleheads with more experience can review this and make sure it makes sense.

Here is our situation, and why we are considering it:
1. 39.6% marginal bracket (but in AMT), high SALT, currently itemizing deductions. This year, we will pay approximately $50k in state income tax. We will be itemizing for 2017, but in 2018 I am 99% sure we will take the standard deduction as the SALT deduction is our only major deduction.

2. Marginal tax bracket 39.6% (BUT we are in AMT for about $5-7k this year so I think the charitable deduction would be at just 28%, not 39.6%--that's what it seems from some reading I've done).

3. We have some appreciated mutual fund shares at Vanguard to open the DAF (VTSAX with about 30% of the value being unrealized gains), so that would be an additional tax benefit.

The reasons we aren't sure:
1. $25k minimum at Vanguard to open a DAF, which significantly more than we have been donating yearly. We would plan to distribute to charities over at least a few years. It's mostly an issue that we haven't budgeted or expected to donate this $25k, and now we don't have long to decide.

2. In the future, we will be at 35% marginal bracket without AMT, so donating at that bracket would actually give better deduction than while at AMT 28% (I think). However, since our SALT deduction of $10k will leave us $14k short of the standardized deduction, I don't think we are likely to ever be in a better tax situation to donate since in the coming years we will need to donate $14k with no deduction just to reach the threshold for itemizing.

I suppose my overall thinking is that we will give approximately $3k-5k yearly to charity, and we can basically use the DAF as a checking acccount to fund our charitable donations. Since we are unlikely to receive a better tax break in the foreseeable future than we are right now, it would be a good idea to make the contribution now. The major downside is obviously losing the flexibility and liquidity of that $25k all at once.

Am I missing any factors (tax issues or otherwise) that we should consider? Does the DAF seem like a good option for us? Also, does the Vanguard DAF require a $25k minimum balance or just a $25k opening deposit?

Thanks for any input.

hillman
Posts: 151
Joined: Thu Jun 07, 2012 2:08 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by hillman » Wed Dec 27, 2017 3:09 pm

I do not have an answer, but I wanted to throw a few additional considerations your way:
1) What about Fidelity for the DAF? I believe the opening limits are lower and the individual distribution thresholds are lower.
2) What is a typical year of charitable giving for you? You could use your DAF to begin a bunching strategy. Let's say your annual charitable giving clocks in at $5k. This year, you give $25k to a DAF. For the next 5 years you do two things: (1) your charitable giving is accomplished through distributions from the DAF and (2) each year you put $5k aside, earmarking it for giving. At the end of 5 years, you make a contribution of the 'earmarked' money to the DAF. This way you get the benefit of the expanded standard deduction for the intervening five years and, if the money was invested, you can contribute stock that has, hopefully, appreciated, allowing you to escape long-term capital gains.

stan1
Posts: 5499
Joined: Mon Oct 08, 2007 4:35 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by stan1 » Wed Dec 27, 2017 3:15 pm

Since you are dealing with AMT I'd put an hour into putting your estimated end of year numbers into tax software and see what the benefits are. In general since you don't expect to be itemizing in future years due to the $10K SALT limit I'd take what you can get now.

If you are going from Vanguard to Vanguard Charitable you have until Sunday per their website (although I'd try to do it before the close of market Thursday so you can talk to someone on Friday if there are any hiccups).

The $25K is the initial contribution. The balance can drop below that. The other point is the minimum grant at Vanguard Charitable is $500. It is $50 at Fidelity Charitable.

User avatar
sometimesinvestor
Posts: 1184
Joined: Wed May 13, 2009 6:54 am

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by sometimesinvestor » Wed Dec 27, 2017 3:48 pm

For reasons having to do with the minimum check you can write I would go with Fidelity rather than Vanguard. This would not be true if you don't make donations smaller than $500. Next year the standard deduction for married filing joint will be around 25K and and you will be able to use up to 10k in SALT if you have over 15k in other deductions. This will include some deductions for Mortgage and charity.(also medical but I doubt you have those deductions (I hope you don't at your income level you would have to be very ill or have poor coverage.)
Anyway after this year your ability to itemize will require large charity donations. Thus in order to take any advantage of the 10k salt deduction you will need to have the big charity deduction. I recommend 20k to fidelity in 2018 with which you will spread out payments as you desire and plan to do this again in a few years , taking the standard deduction starting in 2019.2020 and perhaps even further into 2021 and 2022.

User avatar
CAsage
Posts: 931
Joined: Sun Mar 27, 2016 6:25 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by CAsage » Wed Dec 27, 2017 3:54 pm

Opening a DAF at the same place you hold assets is probably the only way to make it happen on time.... though you can move it later. I opened a Vanguard DAF with 10 years worth of planned giving (might grant quicker...) but will move it to Fidelity when the staff is less crazy busy, since Fidelity has lower check amounts. Same situation, primary deduction was SALT, and that's pretty much over.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

WL2034
Posts: 464
Joined: Tue May 21, 2013 10:36 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by WL2034 » Wed Dec 27, 2017 4:43 pm

Thanks for the input so far. I have already run TurboTax a few days ago to get an idea for how much AMT we're paying, entering just our estimated W2s but not investment income. I will try it again with the charitable donation and see how it affects the tax bill.

And yes, one of the main reasons considering Vanguard primarily right now is because there are only a few days left and we have sufficient taxable investments to fund the DAF. If we opened it at another brokerage, would be concerned it might take longer and not complete by end of 2017.

letsgobobby
Posts: 11195
Joined: Fri Sep 18, 2009 1:10 am

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by letsgobobby » Wed Dec 27, 2017 5:02 pm

My honest opinion is you should give more to charity, so the $25k to Vanguard DAF is more like two year's worth of giving, rather than five. Then you can do the same every other year.

User avatar
FIREchief
Posts: 1921
Joined: Fri Aug 19, 2016 6:40 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by FIREchief » Wed Dec 27, 2017 6:34 pm

I think your looking at all the right variables. If you are at the "end" of the AMT, then as you suggest, incremental lowering of your taxable income via DAF contributions will return a 28% savings. That is only while you back up through the AMT sweet spot. Once you hit the exemption phase out zone, your incremental reductions will return a 35% savings. If you "back up" far enough, you might start shifting some capital gains from 20% to 15%, resulting in the fed subsidizing you charitable giving to the tune of 40 cents on the dollar. Your state may also be kicking in a nickel. Pretty sweet deal! 8-)
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

Counterpoint
Posts: 25
Joined: Sun Jun 05, 2016 1:42 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by Counterpoint » Wed Dec 27, 2017 8:59 pm

I’m in a similar boat in terms of playing catch-up before year-end, so maybe what I plan to do will help the OP. My situation: (1) I have Vanguard mutual funds that have appreciated that I’d like to use to make the donation, but (2) prefer the greater flexibility of Fidelity's DAF (esp. the lower $50 minimum donation to a charity vs $500 at Vanguard).

I also dislike Vanguard’s maintenance fee of $250 when the account value drops below $15K (Fidelity's minimum fee is $100). And as a long-term Vanguard investor I find it disturbing that I couldn't find this fee mentioned on Vanguard Charitable’s Fees and Expenses page https://www.vanguardcharitable.org/indi ... d_expenses - you have to read the fine print in a link at the bottom of the page. I realize that Vanguard Charitable is a different organization from Vanguard, but it’s unusual to feel that a Vanguard entity is being less than transparent.

My plan (along the lines of what CAsage suggested above) is to open a Vanguard Charitable account tomorrow morning with the appreciated mutual funds (trade time has to be before 2pm EST) and then move the whole amount to Fidelity’s DAF in the new year. (Given the short time left in 2017, I don't have enough time to donate Vanguard mutual funds this year to a Fidelity DAF.)

I was told by a Fidelity DAF rep that you can open a Fidelity DAF account with a zero balance to be funded later, and then you ask Vanguard Charitable to make a donation to Fidelity Charitable (which itself is a 501 (c)(3) and hence eligible to receive amounts from Vanguard Charitable) for 100% of your balance. But when I happened to call back about another issue, the second Fidelity rep didn't believe I could have an account with a zero balance initially, so if anyone has experience with doing this (or not being able to) I'd appreciate hearing it. If the correct answer is that I cannot have an account with zero balance temporarily, I'd be willing to open an additional account with Fidelity for $5K by check in 2017 (it just has to be postmarked by year-end) in addition to the Vanguard account. That way I can get the tax deduction for the $5K instead of potentially having to open a $5K Fidelity account next year without a tax deduction.

User avatar
CAsage
Posts: 931
Joined: Sun Mar 27, 2016 6:25 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by CAsage » Wed Dec 27, 2017 10:06 pm

Counterpoint wrote:
Wed Dec 27, 2017 8:59 pm
I also dislike Vanguard’s maintenance fee of $250 when the account value drops below $15K (Fidelity's minimum fee is $100). And as a long-term Vanguard investor I find it disturbing that I couldn't find this fee mentioned on Vanguard Charitable’s Fees and Expenses page https://www.vanguardcharitable.org/indi ... d_expenses - you have to read the fine print in a link at the bottom of the page. I realize that Vanguard Charitable is a different organization from Vanguard, but it’s unusual to feel that a Vanguard entity is being less than transparent.
That deserves a whole topic to itself. Mind if I steal your words? That is WAY MORE THAN I THOUGHT!!!! How can Fidelity do the same (and likely more with lower minimums on disbursements) for $100 per year plus the investment fund expenses? I know keeping the money in my hands is cheaper.... but I gotta reap those deductions now or never. I personally don't feel too bad about the higher investment expenses, but as that fund dwindles down.... $250 is a big chunk of $15k. Humph.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

Counterpoint
Posts: 25
Joined: Sun Jun 05, 2016 1:42 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by Counterpoint » Wed Dec 27, 2017 10:29 pm

Actually Fidelity DAF's expense ratio is excellent if you invest in the single asset pools: 1.5 basis points for the Total Market Stock Index and 2.5bps for the Total Bond Market Index. Too bad their blended pools are such high-expense funds, since I'd rather not have to do the asset allocation monitoring myself for the DAF. But given the relatively small amounts at stake, checking asset allocation once a year will probably suffice.

WL2034
Posts: 464
Joined: Tue May 21, 2013 10:36 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by WL2034 » Wed Dec 27, 2017 11:13 pm

Counterpoint wrote:
Wed Dec 27, 2017 8:59 pm
I’m in a similar boat in terms of playing catch-up before year-end, so maybe what I plan to do will help the OP. My situation: (1) I have Vanguard mutual funds that have appreciated that I’d like to use to make the donation, but (2) prefer the greater flexibility of Fidelity's DAF (esp. the lower $50 minimum donation to a charity vs $500 at Vanguard).

I also dislike Vanguard’s maintenance fee of $250 when the account value drops below $15K (Fidelity's minimum fee is $100). And as a long-term Vanguard investor I find it disturbing that I couldn't find this fee mentioned on Vanguard Charitable’s Fees and Expenses page https://www.vanguardcharitable.org/indi ... d_expenses - you have to read the fine print in a link at the bottom of the page. I realize that Vanguard Charitable is a different organization from Vanguard, but it’s unusual to feel that a Vanguard entity is being less than transparent.

My plan (along the lines of what CAsage suggested above) is to open a Vanguard Charitable account tomorrow morning with the appreciated mutual funds (trade time has to be before 2pm EST) and then move the whole amount to Fidelity’s DAF in the new year. (Given the short time left in 2017, I don't have enough time to donate Vanguard mutual funds this year to a Fidelity DAF.)

I was told by a Fidelity DAF rep that you can open a Fidelity DAF account with a zero balance to be funded later, and then you ask Vanguard Charitable to make a donation to Fidelity Charitable (which itself is a 501 (c)(3) and hence eligible to receive amounts from Vanguard Charitable) for 100% of your balance. But when I happened to call back about another issue, the second Fidelity rep didn't believe I could have an account with a zero balance initially, so if anyone has experience with doing this (or not being able to) I'd appreciate hearing it. If the correct answer is that I cannot have an account with zero balance temporarily, I'd be willing to open an additional account with Fidelity for $5K by check in 2017 (it just has to be postmarked by year-end) in addition to the Vanguard account. That way I can get the tax deduction for the $5K instead of potentially having to open a $5K Fidelity account next year without a tax deduction.
Thanks for the info on this — I didn’t realize there was a $15k minimum balance to avoid $250 fee at Vanguard.

I do have a question regarding your above plan: why would it be necessary to open the Fidelity DAF in 2017? Wouldn’t you already have the tax deduction from the opening and $25k funding of the Vanguard DAF for 2017? And then if you transfer those funds to Fidelity DAF in 2018, does it matter when that Fidelity DAF is opened?

fposte
Posts: 1155
Joined: Mon Sep 02, 2013 1:32 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by fposte » Wed Dec 27, 2017 11:56 pm

Counterpoint wrote:
Wed Dec 27, 2017 8:59 pm


I was told by a Fidelity DAF rep that you can open a Fidelity DAF account with a zero balance to be funded later, and then you ask Vanguard Charitable to make a donation to Fidelity Charitable (which itself is a 501 (c)(3) and hence eligible to receive amounts from Vanguard Charitable) for 100% of your balance. But when I happened to call back about another issue, the second Fidelity rep didn't believe I could have an account with a zero balance initially, so if anyone has experience with doing this (or not being able to) I'd appreciate hearing it.
I have a Fidelity DAF with zero balance as we speak. (It’s waiting for appreciated stocks to come from Vanguard.) You can just open the account online with no human involvement; it took me maybe 5-10 minutes.

Counterpoint
Posts: 25
Joined: Sun Jun 05, 2016 1:42 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by Counterpoint » Thu Dec 28, 2017 7:22 am

fposte wrote:
Wed Dec 27, 2017 11:56 pm
Counterpoint wrote:
Wed Dec 27, 2017 8:59 pm


I was told by a Fidelity DAF rep that you can open a Fidelity DAF account with a zero balance to be funded later, and then you ask Vanguard Charitable to make a donation to Fidelity Charitable (which itself is a 501 (c)(3) and hence eligible to receive amounts from Vanguard Charitable) for 100% of your balance. But when I happened to call back about another issue, the second Fidelity rep didn't believe I could have an account with a zero balance initially, so if anyone has experience with doing this (or not being able to) I'd appreciate hearing it.
I have a Fidelity DAF with zero balance as we speak. (It’s waiting for appreciated stocks to come from Vanguard.) You can just open the account online with no human involvement; it took me maybe 5-10 minutes.
Thanks fposte - that answers my question.
@WL2034: fposte's answer means that my original question about opening a Fidelity account in 2017 is not relevant.

Longdog
Posts: 1042
Joined: Sun Feb 09, 2014 6:56 pm
Location: Philadelphia

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by Longdog » Thu Dec 28, 2017 8:53 am

CAsage wrote:
Wed Dec 27, 2017 3:54 pm
Opening a DAF at the same place you hold assets is probably the only way to make it happen on time.... though you can move it later. I opened a Vanguard DAF with 10 years worth of planned giving (might grant quicker...) but will move it to Fidelity when the staff is less crazy busy, since Fidelity has lower check amounts. Same situation, primary deduction was SALT, and that's pretty much over.
How can you can move assets from one DAF to another?
Steve

oxothuk
Posts: 325
Joined: Thu Nov 10, 2011 8:35 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by oxothuk » Thu Dec 28, 2017 8:57 am

Longdog wrote:
Thu Dec 28, 2017 8:53 am
How can you can move assets from one DAF to another?
By making a "grant" to the other DAF.

bampf
Posts: 120
Joined: Thu Aug 04, 2016 6:19 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by bampf » Thu Dec 28, 2017 9:27 am

Opened and funded a DAF with Vanguard yesterday. Three phone calls and about 30 minutes just to pick the right lot of stock. I could have faxed in a bit of paper, but, that offends me. (Fax machine?? Really?) Annoyed about the $250, but, moot for a time I suppose. Anyway, I did it, it saved me some money for taxes and allowed me to contribute in a meaningful fashion to my charities. Thanks all. Never would have known about this without you all.

--Bampf

bampf
Posts: 120
Joined: Thu Aug 04, 2016 6:19 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by bampf » Thu Dec 28, 2017 9:43 am

I spoke too soon. Vanguard has apparently pulled FIFO instead of the specific lot I asked for as part of my DAF funding yesterday. That is annoying. I will try and fix it. This is harder then it should be. I donate right from my account and it is beyond silly that I have to call and speak to someone and they still manage to screw it up. Feeling frustrated about this, although, it is a very small annoyance.

ivk5
Posts: 261
Joined: Thu Sep 22, 2016 9:05 am

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by ivk5 » Thu Dec 28, 2017 10:07 am

OP: posting more specific income/ tax figures would get you better advice. As one poster noted, you may be in the AMT exemption phaseout / bump zone with marginal rate of 35% rather than 28% (Google for kitces overview on the bump zone). Don't forget state tax savings too.

Fidelity DAF can be opened and funded by EFT today in time for 2017 deduction. Check their deadlines but think it's too late for donating appreciated securities.

iracks
Posts: 32
Joined: Wed Aug 30, 2017 3:34 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by iracks » Thu Dec 28, 2017 11:14 am

Dear ivk5

My salary is $ 120500, residing and working in NJ. I currently am married (no kids), renting and do not own the house.
Please let me know if you recommend me to open DAF (seems like Fidelity opens account for $5K) for tax deduction and also would you suggest how much amount should be enough to avail max. tax deduction?

Many Thanks,
Raghu

Gill
Posts: 4197
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by Gill » Thu Dec 28, 2017 11:53 am

Redundant
Last edited by Gill on Thu Dec 28, 2017 11:54 am, edited 1 time in total.

Gill
Posts: 4197
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by Gill » Thu Dec 28, 2017 11:53 am

iracks wrote:
Thu Dec 28, 2017 11:14 am
Dear ivk5

My salary is $ 120500, residing and working in NJ. I currently am married (no kids), renting and do not own the house.
Please let me know if you recommend me to open DAF (seems like Fidelity opens account for $5K) for tax deduction and also would you suggest how much amount should be enough to avail max. tax deduction?

Many Thanks,
Raghu
Do you expect to itemize your deductions for 2017? It appears you may not be able to, in which case you would get no benefit from a charitable deduction.
Gill

iracks
Posts: 32
Joined: Wed Aug 30, 2017 3:34 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by iracks » Thu Dec 28, 2017 11:56 am

Dear Gill

Yes, to avail tax deduction benefit for 2017, i'm asking if you suggest me to open DAF account now?
oh I thought i have time till April 2018 similar to that of Roth IRA contribution. Did i understand incorrectly?

Thank you,

Raghu

Gill
Posts: 4197
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by Gill » Thu Dec 28, 2017 11:59 am

iracks wrote:
Thu Dec 28, 2017 11:56 am
Dear Gill

Yes, to avail tax deduction benefit for 2017, i'm asking if you suggest me to open DAF account now?
oh I thought i have time till April 2018 similar to that of Roth IRA contribution. Did i understand incorrectly?

Thank you,

Raghu
To receive a charitable deduction in 2017 for a contribution to a DAF the account must be opened and a contribution made before yearend. I was questioning whether you itemize your deductions. If you don't, you would get no benefit from a DAF. Furthermore, it may be too late to open such an account.
Gill

iracks
Posts: 32
Joined: Wed Aug 30, 2017 3:34 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by iracks » Thu Dec 28, 2017 12:06 pm

Dear Gill

Sorry i missed your other question. Currently I'm not itemizing. I thought opening DAF would be good item to start itemization but seems like i cannot do this now.

I follow bogleheads suggestion for tax deduction which is to max out
1) 401k
2) traditional ira
3) plan for hsa

I currently (and will) max out 401k and traditional ira. My employer does not offer HSA plan and because of high cost for self-owned insurance plan - i had to subscribe to HRA plan offering from my employer. Please would you suggest any other ways to avail max. tax deduction.

Many Thanks for your time,

Raghu

iracks
Posts: 32
Joined: Wed Aug 30, 2017 3:34 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by iracks » Thu Dec 28, 2017 12:09 pm

Dear Gill

Sorry i missed your other question. Currently I'm not itemizing. I thought opening DAF would be good item to start itemization but seems like i cannot do this now.

I follow bogleheads suggestion for tax deduction which is to max out
1) 401k
2) traditional ira
3) plan for hsa

I currently (and will) max out 401k and traditional ira. My employer does not offer HSA plan and because of high cost for self-owned insurance plan - i had to subscribe to HRA plan offering from my employer. Please would you suggest any other ways to avail max. tax deduction.

Regarding DAF, do you suggest me opening DAF for availing tax benefits for 2018? If yes, how much would you suggest for contribution to avail max. tax benefit?

Thanks,

Raghu

bbrock
Posts: 383
Joined: Mon Nov 23, 2009 8:55 pm
Location: CA

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by bbrock » Thu Dec 28, 2017 12:28 pm

Like everyone, trying to scramble by year end to make sense of all of this. Sorry to piggyback on to this thread... hope it's okay.

Our bracket is 25% Fed w/ a state tax to CA FTB 9.3% (34.3%). Based on my 2016 return, shows I will probably fall below the std deduction of $24k for 2018. May be b/w $22k-$24k. Thus, would it be worthwhile to still consider a DAF. I new of them previously, but just earmarked for some day many decades away; never thought that day to learn more about them would have been yesterday. I learned and researched yesterday the DAF by Vanguard and Fidelity. The Fidelity one would be more manageable/realistic. I can wrap my arms around the Fidelity one, but don't think wife is onboard w/ wanting to drop $5k at one time to a DAF. Does it make sense given my/our tax brackets? If me just did $5k, I am looking at tax savings of $1250 (at 25% Fed) or $1715 at 34.3% if I include CA.
bbrock

User avatar
JamesSFO
Posts: 3037
Joined: Thu Apr 26, 2012 10:16 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by JamesSFO » Thu Dec 28, 2017 12:42 pm

I'm ~40% Fed, ~10% CA State, and will be capped in 2018 but hit AMT currently, I moved $15K I had at Fidelity in appreciated stocks into a DAF there. There's a risk I will get limited by AMT this year on that HOWEVER: I would give $15K over about 3 years any how and there is a high chance my ability to itemize meaningfully will go away AND I didn't have to pay taxes on about $10K of gain there so wins all around...

WL2034
Posts: 464
Joined: Tue May 21, 2013 10:36 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by WL2034 » Thu Dec 28, 2017 3:08 pm

OP here.

We opened the DAF with Vanguard today. Funded with $25k of VTSAX (of which ~$7500 cap gains).

Overall, very simple process. It would have taken about 10 minutes total if not for the spec ID issues. Spec ID can't be designated online, so must call Vanguard. First rep didn't know what to do and transferred me to the Vanguard Charitable DAF phone number. DAF rep knew what to do, but it had to be done by a Vanguard rep - not Vanguard Charitable rep - so then transferred me back. Total time probably 1-1.5 hours.

As for specific amount of tax benefit, I considered running the numbers in TurboTax to make the decision, but I'll just wait to do it until I do our taxes and post the numbers at that time. No matter the specifics, we won't have another chance to deduct charitable donations for several years so might as well do it while we still can. So I think we (and the charities) are coming out well ahead, in any case.

Like the above poster, we are at 40% fed (when out of AMT), 10% state so will get some good tax benefit now rather than waiting.

As for choosing Vanguard, we probably would have chosen Fidelity with lower minimums and smaller grant sizes possible, but it was too late in the year and we already had the appreciated shares at Vanguard for a fast transaction.

cherijoh
Posts: 4672
Joined: Tue Feb 20, 2007 4:49 pm
Location: Charlotte NC

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by cherijoh » Thu Dec 28, 2017 4:01 pm

Counterpoint wrote:
Wed Dec 27, 2017 8:59 pm
I’m in a similar boat in terms of playing catch-up before year-end, so maybe what I plan to do will help the OP. My situation: (1) I have Vanguard mutual funds that have appreciated that I’d like to use to make the donation, but (2) prefer the greater flexibility of Fidelity's DAF (esp. the lower $50 minimum donation to a charity vs $500 at Vanguard).

I also dislike Vanguard’s maintenance fee of $250 when the account value drops below $15K (Fidelity's minimum fee is $100). And as a long-term Vanguard investor I find it disturbing that I couldn't find this fee mentioned on Vanguard Charitable’s Fees and Expenses page https://www.vanguardcharitable.org/indi ... d_expenses - you have to read the fine print in a link at the bottom of the page. I realize that Vanguard Charitable is a different organization from Vanguard, but it’s unusual to feel that a Vanguard entity is being less than transparent.

My plan (along the lines of what CAsage suggested above) is to open a Vanguard Charitable account tomorrow morning with the appreciated mutual funds (trade time has to be before 2pm EST) and then move the whole amount to Fidelity’s DAF in the new year. (Given the short time left in 2017, I don't have enough time to donate Vanguard mutual funds this year to a Fidelity DAF.)

I was told by a Fidelity DAF rep that you can open a Fidelity DAF account with a zero balance to be funded later, and then you ask Vanguard Charitable to make a donation to Fidelity Charitable (which itself is a 501 (c)(3) and hence eligible to receive amounts from Vanguard Charitable) for 100% of your balance. But when I happened to call back about another issue, the second Fidelity rep didn't believe I could have an account with a zero balance initially, so if anyone has experience with doing this (or not being able to) I'd appreciate hearing it. If the correct answer is that I cannot have an account with zero balance temporarily, I'd be willing to open an additional account with Fidelity for $5K by check in 2017 (it just has to be postmarked by year-end) in addition to the Vanguard account. That way I can get the tax deduction for the $5K instead of potentially having to open a $5K Fidelity account next year without a tax deduction.
I opened up a Fidelity DAF earlier this year and then funded it with a transfer of appreciated assets from Vanguard. There was about a 2 week gep between when the account was opened and when it got funded.

cherijoh
Posts: 4672
Joined: Tue Feb 20, 2007 4:49 pm
Location: Charlotte NC

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by cherijoh » Thu Dec 28, 2017 4:08 pm

iracks wrote:
Thu Dec 28, 2017 12:06 pm
Dear Gill

Sorry i missed your other question. Currently I'm not itemizing. I thought opening DAF would be good item to start itemization but seems like i cannot do this now.

I follow bogleheads suggestion for tax deduction which is to max out
1) 401k
2) traditional ira
3) plan for hsa

I currently (and will) max out 401k and traditional ira. My employer does not offer HSA plan and because of high cost for self-owned insurance plan - i had to subscribe to HRA plan offering from my employer. Please would you suggest any other ways to avail max. tax deduction.

Many Thanks for your time,

Raghu
It is too late to open an account and fund it with appreciated assets for 2017, but you can still open a Fidelity DAF and fund it via check or a wire transfer. Fidelity is showing that it must be postmarked by Saturday (Dec 30th). See this link. You must first set up the account (which can be done online) and then print out the contribution form and mail it with a check.

ivk5
Posts: 261
Joined: Thu Sep 22, 2016 9:05 am

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by ivk5 » Thu Dec 28, 2017 4:27 pm

iracks wrote:
Thu Dec 28, 2017 11:14 am
My salary is $ 120500, residing and working in NJ. I currently am married (no kids), renting and do not own the house.
Please let me know if you recommend me to open DAF (seems like Fidelity opens account for $5K) for tax deduction and also would you suggest how much amount should be enough to avail max. tax deduction?
iracks wrote:
Thu Dec 28, 2017 12:06 pm
Currently I'm not itemizing. I thought opening DAF would be good item to start itemization
Raghu,

Strictly from a tax optimization perspective, in this scenario I would probably not rush to start a DAF in these final days of the year just to bunch charitable giving for a 2017 tax deduction.

- If $120,500 is total household income, and you are maxing one 401(k) with no catch-up and 2x deductible IRAs with 2 personal exemptions and filing joint return, you're in the 15% bracket. Most of your giving will reduce your tax by 15%.
- Some part of your giving will reduce your tax by 0% since you are not currently itemizing. (Exactly how much depends on what you paid this year in state/local taxes and other available deductions, ie what is the gap between the sum of other deductions and the $12,700 std deduction.)
- So net federal income tax benefit of charitable contributions would likely be less than 15%, plus some NJ tax (say ~5%).

As you can see from many active discussion threads here, there are other benefits to a DAF, and you may decide to use one as a conduit for your annual giving. But personally I would not bunch multiple years of contributions into the coming days for a benefit of <20%. It's a different story for taxpayers where combined Federal/State marginal rate is 45-50%.

iracks
Posts: 32
Joined: Wed Aug 30, 2017 3:34 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by iracks » Thu Dec 28, 2017 5:33 pm

cherijoh wrote:
Thu Dec 28, 2017 4:08 pm
iracks wrote:
Thu Dec 28, 2017 12:06 pm
Dear Gill

Sorry i missed your other question. Currently I'm not itemizing. I thought opening DAF would be good item to start itemization but seems like i cannot do this now.

I follow bogleheads suggestion for tax deduction which is to max out
1) 401k
2) traditional ira
3) plan for hsa

I currently (and will) max out 401k and traditional ira. My employer does not offer HSA plan and because of high cost for self-owned insurance plan - i had to subscribe to HRA plan offering from my employer. Please would you suggest any other ways to avail max. tax deduction.

Many Thanks for your time,

Raghu
It is too late to open an account and fund it with appreciated assets for 2017, but you can still open a Fidelity DAF and fund it via check or a wire transfer. Fidelity is showing that it must be postmarked by Saturday (Dec 30th). See this link. You must first set up the account (which can be done online) and then print out the contribution form and mail it with a check.
Dear cherijoh

Thank you for providing this link, i will review this now.

Thanks!

iracks
Posts: 32
Joined: Wed Aug 30, 2017 3:34 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by iracks » Thu Dec 28, 2017 5:34 pm

ivk5 wrote:
Thu Dec 28, 2017 4:27 pm
iracks wrote:
Thu Dec 28, 2017 11:14 am
My salary is $ 120500, residing and working in NJ. I currently am married (no kids), renting and do not own the house.
Please let me know if you recommend me to open DAF (seems like Fidelity opens account for $5K) for tax deduction and also would you suggest how much amount should be enough to avail max. tax deduction?
iracks wrote:
Thu Dec 28, 2017 12:06 pm
Currently I'm not itemizing. I thought opening DAF would be good item to start itemization
Raghu,

Strictly from a tax optimization perspective, in this scenario I would probably not rush to start a DAF in these final days of the year just to bunch charitable giving for a 2017 tax deduction.

- If $120,500 is total household income, and you are maxing one 401(k) with no catch-up and 2x deductible IRAs with 2 personal exemptions and filing joint return, you're in the 15% bracket. Most of your giving will reduce your tax by 15%.
- Some part of your giving will reduce your tax by 0% since you are not currently itemizing. (Exactly how much depends on what you paid this year in state/local taxes and other available deductions, ie what is the gap between the sum of other deductions and the $12,700 std deduction.)
- So net federal income tax benefit of charitable contributions would likely be less than 15%, plus some NJ tax (say ~5%).

As you can see from many active discussion threads here, there are other benefits to a DAF, and you may decide to use one as a conduit for your annual giving. But personally I would not bunch multiple years of contributions into the coming days for a benefit of <20%. It's a different story for taxpayers where combined Federal/State marginal rate is 45-50%.
Dear ivk5

Thanks much! I was thinking i was doing bad! I'll review more about DAF and will work around this.

Many thanks for your time,
raghu

bbrock
Posts: 383
Joined: Mon Nov 23, 2009 8:55 pm
Location: CA

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by bbrock » Thu Dec 28, 2017 5:37 pm

cherijoh wrote:
Thu Dec 28, 2017 4:08 pm
iracks wrote:
Thu Dec 28, 2017 12:06 pm
Dear Gill

Sorry i missed your other question. Currently I'm not itemizing. I thought opening DAF would be good item to start itemization but seems like i cannot do this now.

I follow bogleheads suggestion for tax deduction which is to max out
1) 401k
2) traditional ira
3) plan for hsa

I currently (and will) max out 401k and traditional ira. My employer does not offer HSA plan and because of high cost for self-owned insurance plan - i had to subscribe to HRA plan offering from my employer. Please would you suggest any other ways to avail max. tax deduction.

Many Thanks for your time,

Raghu
It is too late to open an account and fund it with appreciated assets for 2017, but you can still open a Fidelity DAF and fund it via check or a wire transfer. Fidelity is showing that it must be postmarked by Saturday (Dec 30th). See this link. You must first set up the account (which can be done online) and then print out the contribution form and mail it with a check.
@cherijoh, Really, it is too late to fund a DAF w/ appreciated assets from my Vanguard taxable account? I was hoping to have time and accomplish this tomorrow or Sat.
bbrock

WL2034
Posts: 464
Joined: Tue May 21, 2013 10:36 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by WL2034 » Thu Dec 28, 2017 5:45 pm

bbrock wrote:
Thu Dec 28, 2017 5:37 pm
cherijoh wrote:
Thu Dec 28, 2017 4:08 pm
iracks wrote:
Thu Dec 28, 2017 12:06 pm
Dear Gill

Sorry i missed your other question. Currently I'm not itemizing. I thought opening DAF would be good item to start itemization but seems like i cannot do this now.

I follow bogleheads suggestion for tax deduction which is to max out
1) 401k
2) traditional ira
3) plan for hsa

I currently (and will) max out 401k and traditional ira. My employer does not offer HSA plan and because of high cost for self-owned insurance plan - i had to subscribe to HRA plan offering from my employer. Please would you suggest any other ways to avail max. tax deduction.

Many Thanks for your time,

Raghu
It is too late to open an account and fund it with appreciated assets for 2017, but you can still open a Fidelity DAF and fund it via check or a wire transfer. Fidelity is showing that it must be postmarked by Saturday (Dec 30th). See this link. You must first set up the account (which can be done online) and then print out the contribution form and mail it with a check.
@cherijoh, Really, it is too late to fund a DAF w/ appreciated assets from my Vanguard taxable account? I was hoping to have time and accomplish this tomorrow or Sat.
I think the deadline to fund a VANGUARD DAF with Vanguard appreciated shares is DEC 29 (tomorrow) at 130pm EST. This is based on my experience today (any transaction occurring after 130pm is processed the following day at market close). I am not sure if they process transactions on Saturday/ Sunday.

I am not sure what the options are for funding DAF with shares from different brokerages will be at this point.

fundseeker
Posts: 686
Joined: Mon Dec 24, 2007 9:02 am

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by fundseeker » Thu Dec 28, 2017 5:52 pm

I believe Fidelity has people working all weekend to assist people with DAFs, but I do not know if VG is that interested in the DAF business.

cherijoh
Posts: 4672
Joined: Tue Feb 20, 2007 4:49 pm
Location: Charlotte NC

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by cherijoh » Thu Dec 28, 2017 6:06 pm

bbrock wrote:
Thu Dec 28, 2017 5:37 pm
cherijoh wrote:
Thu Dec 28, 2017 4:08 pm
iracks wrote:
Thu Dec 28, 2017 12:06 pm
Dear Gill

Sorry i missed your other question. Currently I'm not itemizing. I thought opening DAF would be good item to start itemization but seems like i cannot do this now.

I follow bogleheads suggestion for tax deduction which is to max out
1) 401k
2) traditional ira
3) plan for hsa

I currently (and will) max out 401k and traditional ira. My employer does not offer HSA plan and because of high cost for self-owned insurance plan - i had to subscribe to HRA plan offering from my employer. Please would you suggest any other ways to avail max. tax deduction.

Many Thanks for your time,

Raghu
It is too late to open an account and fund it with appreciated assets for 2017, but you can still open a Fidelity DAF and fund it via check or a wire transfer. Fidelity is showing that it must be postmarked by Saturday (Dec 30th). See this link. You must first set up the account (which can be done online) and then print out the contribution form and mail it with a check.
@cherijoh, Really, it is too late to fund a DAF w/ appreciated assets from my Vanguard taxable account? I was hoping to have time and accomplish this tomorrow or Sat.
Yes it is too late if you want to open the account at Fidelity directly and use appreciated VG assets.

No, if you open at Fidelity and have Fidelity assets to transfer. (It can still be done online or by phone; it would have to be delivered by Sat if mailed).

Who knows if you are opening your account at VG and want to use VG assets. I think I read that VG would only guarantee the transaction would be completed if it was initiated by last Friday at 2 pm.

User avatar
BL
Posts: 7950
Joined: Sun Mar 01, 2009 2:28 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by BL » Thu Dec 28, 2017 6:23 pm

iracks wrote:
Thu Dec 28, 2017 12:09 pm
Dear Gill

Sorry i missed your other question. Currently I'm not itemizing. I thought opening DAF would be good item to start itemization but seems like i cannot do this now.

I follow bogleheads suggestion for tax deduction which is to max out
1) 401k
2) traditional ira
3) plan for hsa

I currently (and will) max out 401k and traditional ira. My employer does not offer HSA plan and because of high cost for self-owned insurance plan - i had to subscribe to HRA plan offering from my employer. Please would you suggest any other ways to avail max. tax deduction.

Regarding DAF, do you suggest me opening DAF for availing tax benefits for 2018? If yes, how much would you suggest for contribution to avail max. tax benefit?

Thanks,

Raghu
Instead of itemizing you get a standard deduction of 12,700 for married couple filing jointly. Most families without a home mortgage do not have enough itemizing (charitable giving, state and local taxes, and medical costs above 10% or 7.5% AGI) to get higher than the 12,700 already available, so they do not itemize. Some have extreme medical or other deductions which are an exception. A DAF or direct charitable contributions could raise the amount, but it would still be hard for most to get above the 12,700 without mortgage interest. Only the amount above 12,700 would be an advantage to you. As of next year, it would be only an amount above about 24,000 with the new law.

bbrock
Posts: 383
Joined: Mon Nov 23, 2009 8:55 pm
Location: CA

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by bbrock » Thu Dec 28, 2017 6:52 pm

&WL2034, fundseeker. When I think about the situation and realize the remaining trading sessions of the 2017 market, I think my ship has sailed to open/fund a fidelity DAF with appreciated assets from my taxable Vanguard account. But then when I read more from a few of the prior posts about those in a 40% bracket, and think about my low 25% bracket, a DAF may not have as much of an impact for me. But still, the benefits of a DAF are understood for things such as consolidated gifting from one account, and having more control over it. I doubt I will open it with $5000 cash versus appreciated assets. As such I’m gonna have to shelf this until 2025 or hopefully sooner.

Well, now let me look to at least donate a smaller amount to my local NPR station or Cal Academy of Sciences.
bbrock

WL2034
Posts: 464
Joined: Tue May 21, 2013 10:36 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by WL2034 » Thu Dec 28, 2017 7:02 pm

cherijoh wrote:
Thu Dec 28, 2017 6:06 pm


Who knows if you are opening your account at VG and want to use VG assets. I think I read that VG would only guarantee the transaction would be completed if it was initiated by last Friday at 2 pm.
Per Vanguard Charitable FAQ,

“Contributions of mutual funds or securities that are held at Vanguard entered online with electronic authorization can be received through end of day December 31st for a 2017 deduction.”

So I’m not sure if that is with the knowledge that Dec 31 is a Sunday this year or not. But if you have appreciated shares at Vanguard that can be transferred online, you should (hopefully) be ok at least until Dec 29 at 130pm. I’m not sure how it will work over the weekend, would give Vanguard Charitable a call if thinking about doing a transaction at that time.

bbrock
Posts: 383
Joined: Mon Nov 23, 2009 8:55 pm
Location: CA

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by bbrock » Thu Dec 28, 2017 7:26 pm

Dang it, so my local NPR station KQED and Cal C
Academy of sciences do not have brokerages set up with Vanguard and as such I cannot sell appreciated assets due to having to submit paperwork. The only way this can be completed prior to noon tomorrow is if I find some charitable organizations that have their accounts with Vanguard. Anybody know of a charity/organization that uses Vanguard brokerage?
bbrock

ivk5
Posts: 261
Joined: Thu Sep 22, 2016 9:05 am

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by ivk5 » Thu Dec 28, 2017 7:58 pm

bbrock wrote:
Thu Dec 28, 2017 7:26 pm
Dang it, so my local NPR station KQED and Cal C
Academy of sciences do not have brokerages set up with Vanguard and as such I cannot sell appreciated assets due to having to submit paperwork. The only way this can be completed prior to noon tomorrow is if I find some charitable organizations that have their accounts with Vanguard. Anybody know of a charity/organization that uses Vanguard brokerage?
To me this is the tail wagging the dog. Given your earlier post that you expect to have other itemized deductions almost equal to the std deduction in future years, I'd suggest donating the appreciated securities via a DAF to the charity of your choice in 2018 or another future year, rather than scrambling to donate in the final days of 2017 to a charity you would not have otherwise chosen to support just for a slightly greater tax benefit.

User avatar
gasdoc
Posts: 1428
Joined: Mon Nov 03, 2014 8:26 am

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by gasdoc » Thu Dec 28, 2017 8:08 pm

May I sneak in a quick question? I was looking over my 2016 1040, and noticed a line where $1K was added for the AMT. I assume this means I came under the AMT by about $1K. I am thinking there is therefore no reason to start a DAF because I would not really be able to deduct the contribution. Correct?

Thanks,
gasdoc

livesoft
Posts: 60426
Joined: Thu Mar 01, 2007 8:00 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by livesoft » Thu Dec 28, 2017 8:13 pm

Incorrect. Charitable contributions are not an AMT preference item like property taxes. You can check this yourself with tax software.
Wiki This signature message sponsored by sscritic: Learn to fish.

User avatar
gasdoc
Posts: 1428
Joined: Mon Nov 03, 2014 8:26 am

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by gasdoc » Thu Dec 28, 2017 8:27 pm

livesoft wrote:
Thu Dec 28, 2017 8:13 pm
Incorrect. Charitable contributions are not an AMT preference item like property taxes. You can check this yourself with tax software.
Thanks, livesoft, so perhaps I should reconsider.

gasdoc

jLove
Posts: 14
Joined: Sat Aug 17, 2013 8:05 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by jLove » Thu Dec 28, 2017 8:50 pm

bampf wrote:
Thu Dec 28, 2017 9:43 am
I spoke too soon. Vanguard has apparently pulled FIFO instead of the specific lot I asked for as part of my DAF funding yesterday. That is annoying. I will try and fix it. This is harder then it should be. I donate right from my account and it is beyond silly that I have to call and speak to someone and they still manage to screw it up. Feeling frustrated about this, although, it is a very small annoyance.
bampf,

Were you able to get this resolved? It appears the exact same thing happened with my transaction. I gave the specific lot ID to Vanguard Flagship rep to fund the DAF yesterday. Today, my account shows the funds were transferred to Vanguard Charitable in the exact # of shares I specified, however the specific lot I specified still appears in my share balance. I plan to call tomorrow to address this. Thank you!

bampf
Posts: 120
Joined: Thu Aug 04, 2016 6:19 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by bampf » Thu Dec 28, 2017 8:54 pm

jLove wrote:
Thu Dec 28, 2017 8:50 pm
bampf wrote:
Thu Dec 28, 2017 9:43 am
I spoke too soon. Vanguard has apparently pulled FIFO instead of the specific lot I asked for as part of my DAF funding yesterday. That is annoying. I will try and fix it. This is harder then it should be. I donate right from my account and it is beyond silly that I have to call and speak to someone and they still manage to screw it up. Feeling frustrated about this, although, it is a very small annoyance.
bampf,

Were you able to get this resolved? It appears the exact same thing happened with my transaction. I gave the specific lot ID to Vanguard Flagship rep to fund the DAF yesterday. Today, my account shows the funds were transferred to Vanguard Charitable in the exact # of shares I specified, however the specific lot I specified still appears in my share balance. I plan to call tomorrow to address this. Thank you!
Perhaps. My adviser said they have the instructions and it will take about a week to clear up. I have the email and I will save it and I am sure it will get sorted.

WL2034
Posts: 464
Joined: Tue May 21, 2013 10:36 pm

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by WL2034 » Thu Dec 28, 2017 9:05 pm

bampf wrote:
Thu Dec 28, 2017 8:54 pm
jLove wrote:
Thu Dec 28, 2017 8:50 pm
bampf wrote:
Thu Dec 28, 2017 9:43 am
I spoke too soon. Vanguard has apparently pulled FIFO instead of the specific lot I asked for as part of my DAF funding yesterday. That is annoying. I will try and fix it. This is harder then it should be. I donate right from my account and it is beyond silly that I have to call and speak to someone and they still manage to screw it up. Feeling frustrated about this, although, it is a very small annoyance.
bampf,

Were you able to get this resolved? It appears the exact same thing happened with my transaction. I gave the specific lot ID to Vanguard Flagship rep to fund the DAF yesterday. Today, my account shows the funds were transferred to Vanguard Charitable in the exact # of shares I specified, however the specific lot I specified still appears in my share balance. I plan to call tomorrow to address this. Thank you!
Perhaps. My adviser said they have the instructions and it will take about a week to clear up. I have the email and I will save it and I am sure it will get sorted.
When I did the transaction today, the rep said they will file the instructions regarding spec ID--it's some type of internal communication within Vanguard. The default for the electronic transfer is FIFO. Based on these experiences, I expect that the initial transfer will show up as FIFO and then they will review the instructions and make the correct adjustments regarding the spec ID. It would be nice if they would let you select spec ID on the electronic transfer page, but they don't.

cherijoh
Posts: 4672
Joined: Tue Feb 20, 2007 4:49 pm
Location: Charlotte NC

Re: New Tax Bill -- Should we open a Donor Advised Fund (DAF) before the end of the year?

Post by cherijoh » Thu Dec 28, 2017 9:05 pm

WL2034 wrote:
Thu Dec 28, 2017 7:02 pm
cherijoh wrote:
Thu Dec 28, 2017 6:06 pm


Who knows if you are opening your account at VG and want to use VG assets. I think I read that VG would only guarantee the transaction would be completed if it was initiated by last Friday at 2 pm.
Per Vanguard Charitable FAQ,

“Contributions of mutual funds or securities that are held at Vanguard entered online with electronic authorization can be received through end of day December 31st for a 2017 deduction.”

So I’m not sure if that is with the knowledge that Dec 31 is a Sunday this year or not. But if you have appreciated shares at Vanguard that can be transferred online, you should (hopefully) be ok at least until Dec 29 at 130pm. I’m not sure how it will work over the weekend, would give Vanguard Charitable a call if thinking about doing a transaction at that time.
Maybe the deadline of last Friday was for non-VG held assets. (My DAF is at Fidelity due to the lower grant limits). In any case, I don't think I'd want to wait until Sunday evening to do the transaction. The system could get overloaded due to last minute procrastinators.

Post Reply