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Post by Admin/YBB on Jan 10, 2022 16:37:45 GMT -6
When I go onto Schwab Charitable/DAF and click Contribute to Account, it shows my Schwab brokerage account to transfer stuff from. Is TD Ameritrade not shown there? I don't know where the integration of systems stands.
It also shows option to use paper form to use for transfer from non-Schwab account, but I assume that form is sent to Schwab DAF. May be the Rep is offering a shortcut to initiate the transfer process from TD Ameritrade (that is now part of Schwab).
Can you do online transfer from TD Ameritrade to Schwab brokerage first? Then the online transfer from Schwab brokerage to DAF should be possible.
If using the paper route, include your correspondence with Schwab DAF Rep.
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Post by anitya on Jan 14, 2022 22:14:52 GMT -6
Thanks. You know I will be the last person to do paper route. The integration might take as much as another 18 months.
I will transfer from TD taxable to Schwab taxable and then to Schwab DAF.
How long does the transfer from Schwab taxable to Schwab DAF take when you initiate from your Schwab DAF account? Do you get the same day Contribution date? Useful for market timing purposes.
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Post by Admin/YBB on Feb 20, 2022 16:34:23 GMT -6
Musk's $5.7 Billion Donation to DAF (?) Reignites Talks of RegulationIt is unclear how Elon Musk donated $5.7 billion in Tesla/TSLA stock, but suspicions are growing that he used his DAF (Donor-Advised Fund) to claim a huge instant tax deductions of billions. Normally a hyperactive tweeter, Musk is unusually quiet on this and has stuck to minimally required filings. This has reignited talks of abuses of DAFs and new regulations for DAFs. In the past, Musk has also channeled millions from his private foundation to his DAF. www.livemint.com/companies/people/elon-musk-s-5-7-billion-donation-sparks-questions-about-giving-11645241285479.htmlapnews.com/article/spacex-business-philanthropy-elon-musk-6cacb6f17fb88f7702b7e91006c20cc2Response to comments at Fidelity Investor Community yogibearbull Level 9 5m ago, 2/21/22 I like DAFs & have one (but not at Fido). It is a great product for small investors for whom the foundation route doesn't make sense. I had questions. I don't have answers. I didn't research the source beyond noting that most cited the original article from AP; I included a 2nd source just in case the original AP article couldn't be accessed. DAFs are being watched by politicians & regulators. And negative publicity doesn't help. Their concerns are skipping grants (most DAFs allow annual grant skipping but grant requirement kicks in every 4-5 yrs), grants from foundations to DAFs, grants from DAFs to other DAFs, using losely-regulated DAFs when better-regulated foundations are more appropriate, etc. Some past proposals have been draconian - requiring 20% or more annual grants, draining new contributions within 5 years, etc. So, my concerns. I posted the article here because many here do use DAFs and Fidelity Charitable was mentioned in the article. But it may not have been the only one if the DAFs were indeed used.
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Post by anitya on Mar 7, 2022 1:28:04 GMT -6
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Post by anitya on Sept 21, 2023 12:46:26 GMT -6
I am going to explore Fidelity DAF, which is why I came to this thread today. I transferred publicly traded MLP units (trades heavily) to Schwab DAF. Very disappointed with their customer service - got three different answers from their Reps when I called to make sure they sell the MLP units promptly from the DAF to minimize UBTI. The same Rep does not follow up. Then they have a different Rep call me and send me a big CYA email about UBTI, that the transfer to the DAF could have negative tax consequences to me, including completely wrong stuff, and the email ends with telling me that they will not state the fair market value of the MLP units I transferred in the receipt they will give me for the transfer (bizarre) and that I can revoke the transfer to the DAF or tell them that I agree to their conditions, including that they will hold back cash in the DAF to cover for any UBTI tax. I immediately wrote back to them telling them to proceed and that I do not want to revoke my donation. Then they did not sell the units for a few hours after the market opened the following day and I had to follow up again. Giving away money should not be this difficult. Recent Schwab press release that they lost a lot of managed accounts in the integration with TD makes more sense now. Do I use the closing price for the day on the date I transferred the MLP units for purposes of the charitable deduction? Edit: Determining the Value of Donated Property - IRS Pub 561. www.irs.gov/pub/irs-pdf/p561.pdf
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Post by Admin/YBB on Sept 21, 2023 13:22:27 GMT -6
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Post by anitya on Sept 21, 2023 13:46:32 GMT -6
"I vaguely recall from years ago that for donated stock, eventually Schwab confirmed the value of donation in 1-2 days. That became the donation figure, not what I could lookup as market quotes." When Schwab DAF issues a receipt with the value of the donation, they take the average trading price on the day of the transfer.* They are very specific in the email to me that the receipt will not say the value of the donation but it will only say the number of units of the MLP the DAF received. This is a very specific Schwab issue. I spoke with Fidelity (1-800-952-4438) today and they said they would have stated the value of the donation on the receipt if I had donated the MLP units to their DAF. The Fidelity Rep was very good and it seems Fidelity Charitable Giving reps are trained differently. As to Schwab DAF being bureaucratic, I am sure Fidelity DAF may also have their own issues - but I would rather deal with two of them so I can use each for what they are good for, unless Fidelity turns out to be so lovely that I close out Schwab DAF (unlikely). * When you click on the Fund Your Account button, the next Schwab DAF page has FAQs. The second FAQ, how Schwab determines the value of non-cash assets - "Generally, for purposes of the charitable contribution deduction, fair market value is determined on the date that contributions are received by Schwab Charitable. For contributions of publicly traded stock, the fair market value is the average of the high and the low for the day that the stock was received by Schwab Charitable. For mutual funds, the fair market value is the closing price on the date of receipt by Schwab Charitable. Securities are typically liquidated the business day after receipt, so the fair market value for tax purposes may differ from the amount of sales proceeds credited to the account." Fidelity DAF also takes the high-low price average on the date of transfer for marketable securities to determine the value of the donation. It does not matter what time of the week day the transfer is done. The Fidelity and Schwab rules come from the IRS rules - also stated in IRS pub 561 - Determining the Value of Donated Property. www.irs.gov/pub/irs-pdf/p561.pdfFidelity mentioned they issue two items when they receive marketable securities. They immediately issue is a receipt for the donation. Later they issue an IRS Form 8283 which the donor must include with their tax return. www.irs.gov/pub/irs-pdf/f8283.pdf https://www.irs.gov/instructions/i8283
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Post by anitya on Sept 22, 2023 14:16:24 GMT -6
Though not specific to DAF per se, I learned that, the charitable deduction needs to be reduced by any ordinary income (and short term capital gain) the donor would have recognized if the donor sold the property (incl marketable securities) contributed. So, it is important to remember to donate long term capital gain property if FMV of a built-in gain property is sought to be deducted.
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Post by Admin/YBB on Oct 31, 2023 9:01:46 GMT -6
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Post by Admin/YBB on Dec 15, 2023 7:54:39 GMT -6
MIT DAF is in the news because Bill Ackman is complaining about its activities. But his complaints have been misdirected to MIT Corp, MIT Board, etc, and he is now polishing his complaints as he learns about the complexities of DAFs. It's as if one is unhappy with Fidelity DAF, one shoots an email to Abigail Johnson (or, complaints about Schwab DAF sent to Chuck Schwab). The DAF operations are setup as separate 501c3 entities/subsidiaries and are at arms-length from those of its sponsors. Note that 501c3 organizations are prohibited from political activities and contributions to them are tax deductible. But 501c4 organizations can engage in limited political activities and contributions to them are NOT tax-deductible. There are some organizations that run both 501c3 and 501c4 operations, and doublecheck on details if you are planning to make tax-deductible contributions. Wiki shows 29 types of 501c organizations, from 501c1 to 501c29. www.irs.gov/charities-non-profits/charitable-organizations/donor-advised-fundswww.irs.gov/charities-non-profits/charitable-organizations/new-requirements-for-donor-advised-fundsWiki on 501c en.wikipedia.org/wiki/501(c)_organizationTwitterLINK TwitterLINK BillAckmanYBB Personal Finance @ybb_Finance (12/15/23) People are surprised that beyond the firms such as Fidelity, Schwab, Vanguard, etc, there are #DAFs sponsored by churches & universities. Same rules apply to all DAFs. The sponsoring org is typically the default beneficiary of funds. It may also manage funds or use 3rd parties.
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Post by Admin/YBB on Feb 20, 2024 19:54:13 GMT -6
DAF UpdatingIt's important to periodically review the DAF and update information as necessary. Don't let the DAF lapse - after an owner without any successor or beneficiary passes away, the DAF funds will by default will go into sponsors' giant master pool - there may be only a short window to regain control of funds. Remember that the DAF monies are completed gifts and the so-called "owners" (a term for convenient references) only have the recommendation rights while alive. Here is the form for updating Schwab DAF; others (Fidelity, Vanguard, etc) should have similar forms. www.schwabcharitable.org/public/file/p-5251073
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Post by Admin/YBB on Feb 27, 2024 16:44:48 GMT -6
Proposed Changes for DAFs, 2023-24
The term DAF is used widely now for the DAFs sponsored by brokerage or fund firms’ nonprofit subsidiaries, and by nonprofit institutions and community foundations/organizations. To the retail DAF users, they all may work similarly, but they differ in their regulations. The proposed changes would formalize their classification into DAFs and donor-advisors, etc, and some DAFs now may have to operate with different regulatory frameworks. Stiff excise taxes of 20% for DAF sponsors and 5% for DAF managers will apply for abnormal uses of DAFs. Proposals will clarify how the DAF funds can or cannot be used. If some funds are used for personal or other taxable for-profit purposes or services, there will be excise taxes on DAF sponsors and DAF managers. Now some activities can develop under the DAF umbrella, but later can be converted to taxable/for-profit activities by paying taxes. Proposals will impose stiff excise taxes on the DAF sponsors and managers that will make this costly. If people with large DAFs use external advisory services for their DAFs, those advisory services cannot be paid from the DAF funds. But it’s unclear if the DAF sponsors engage external agencies or services to promote and market their DAFs, whether this exclusion will also apply. It seems that these changes relate to DAF sponsors and managers, and large DAFs, but not to the retail users of DAFs. Especially notable are the absence of any proposals related to the levels of annual distributions, exhaustion of DAFs within some timeframe, etc. Lot of these materials aren’t easy to read, and additions/clarifications may be added later. Bloomberg news.bloombergtax.com/tax-insights-and-commentary/donor-advised-funds-would-face-big-headaches-under-irs-proposalThink Advisor www.thinkadvisor.com/2024/02/16/comments-close-on-irs-excise-tax-plan-for-donor-advised-funds/Morgan Lewis (Law Firm) www.morganlewis.com/pubs/2023/11/irs-proposes-regulations-for-excise-taxes-on-taxable-distributions-from-donor-advised-fundsJ D Supra www.jdsupra.com/legalnews/donor-advised-funds-proposed-regs-offer-9701864/Federal Register www.govinfo.gov/content/pkg/FR-2023-11-14/pdf/2023-24982.pdf
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Post by anitya on Mar 3, 2024 15:29:50 GMT -6
IRS Form 8283 may be required to be filed by a Donee when non-cash property is contributed to a charity (or a DAF). Cash contribution includes contribution cash, by checks, or by credit card and do not require filing of this form. Who must file? The IRS website and Form 8283 header says, "Attach one or more Forms 8283 to your tax return if you claimed a total deduction of over $500 for all contributed property." www.irs.gov/pub/irs-pdf/f8283.pdfBut when you read "Who Must File" in the instructions to the form, it says, " You must file one or more Forms 8283 if the amount of your deduction for each noncash contribution is more than $500. You must also file Form 8283 if you have a group of similar items for which a total deduction of over $500 is claimed." [Emphasis added.] www.irs.gov/pub/irs-pdf/i8283.pdfNote that it is the amount of deduction and not the fair market value of contributed property that determines whether one is required to file this form. Please read instructions and rules when a deduction can be lower than the FMV (e.g., ordinary income or short term capital gain property).
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Post by Admin/YBB on Mar 6, 2024 6:43:47 GMT -6
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