Once Roth conversions, tax‑loss harvesting, and RMD planning are complete, the final step in a coordinated year‑end strategy is charitable giving through appreciated stock or a donor‑advised fund (DAF). These strategies help reduce capital gains taxes, simplify giving, and support causes you care about, all before December 31.
1. Donate Appreciated Stock to Avoid Capital Gains Tax
Donating appreciated stock held for more than one year allows you to give the full value of the shares without paying capital gains tax. The IRS confirms that donating appreciated securities to a qualified charity may allow you to deduct the fair market value while avoiding capital gains.
Action steps:
- Identify positions with significant unrealized gains.
- Donate shares directly to a qualified charity or DAF.
- Request acknowledgment letters for tax reporting.
- Complete transfers before year‑end to ensure processing.
2. Use a Donor-Advised Fund for Flexible, Organized Giving
A donor‑advised fund (DAF) allows you to make a charitable contribution now, receive an immediate tax benefit, and distribute grants to charities over time. DAFs are especially helpful for households experiencing income changes, such as retirement, business transitions, or widowhood. For women navigating change, our planning checklists can serve as a helpful resource along the way.
Action steps:
- Contribute appreciated stock, cash, or other assets to the DAF.
- Take a tax deduction in the year of contribution.
- Recommend grants to charities whenever you’re ready.
- Use the DAF to organize multi‑year giving plans.
3. Coordinate Charitable Giving With Your Entire Year-End Plan
By the time you reach this step, you’ve already shaped your taxable income through:
- Roth conversions
- Tax‑loss harvesting
- RMDs and QCDs
Now you can finalize your charitable strategy with appreciated stock or a DAF contribution. This ensures your giving is intentional, tax‑efficient, and aligned with your long‑term financial plan.
Finish the Year Strong With Strategic Charitable Giving
Donating appreciated stock and using a donor‑advised fund are powerful ways to support causes you care about while reducing taxes. These strategies are the final step in a thoughtful year‑end plan that protects your wealth and strengthens your financial future.
If you’d like help reviewing appreciated positions or exploring DAF options, schedule a meeting with Longview Insurance and Investments.
Sources:
- Internal Revenue Service. “Charitable Contributions: Appreciated Property.” irs.gov.
- Internal Revenue Service. “Publication 526: Charitable Contributions.” irs.gov.
- Vanguard Charitable. “2026 Giving Strategies Report.” vanguardcharitable.org.
- Charles Schwab. “Donor-Advised Fund Basics.” schwab.com.