 Okay. So what we're going to talk about today is tax efficient giving. So that is making it so that you can pay the least amount of taxes as possible when you give and thus increase the total amount that you give and we're talking about other strategies as well. This will talk about different types of tax strategies, but it'll also talk about how they supply with cryptocurrency. And I'll also try to assume that you don't know anything. And there's a general outline of what we're going to be talking about. So you are here right at the beginning, just go over and talk about what we're going to be covering. So where to give general examples in general about tax efficiency, some specific application to cryptocurrency, and then some opportunity for questions. And with sections parts three and four, on those we'll have some case examples where because some of the stuff is a little bit complicated, I'll give you a fact pattern and we'll kind of talk our way through it. So about me, I've been engaged in effective altruism since 2017, a licensed attorney, did a bunch of other school stuff, done some continuing education, looking at technical aspects of giving, although that doesn't count the enormous amount of books I've read on different aspects of taxes and philanthropy. I give personally and I give publicly on my and you can see that on my personal website, which is just erinhamlin.com, got a bunch of resources on there. One of the things I do when I do give publicly is I also explain exactly how I give, not just where I give to and the rationale for why I do it. I do own cryptocurrency myself. I'm not an expert on cryptocurrency. And I've written a number of essays on technical aspects of giving. So why give this talk? Because I've found myself being really bothered by two things. One is when charities don't get the amount of funds that they should because of taxpayers. And then secondly, when I have heard of folks paying enormous tax bills that were completely avoidable. And so I just don't want those things to happen to you. So that's why I'm here giving this talk for you. Low disclaimer. So I will not be giving any investment advice. And I will not be helping any of you with your personal taxes. I'm not your personal lawyer. I'm just doing this for informational purposes. This I find is a really great guide in particular when you're talking with your tax advisor or financial planner. Some of them, unfortunately, aren't as sophisticated dealing with philanthropy. And so this can also provide a good guide for when you're talking with your personal advisor. And I do spend a lot of time on this through my daily work. And I spend an enormous round of time putting these essays together in a way that is understandable. But the tax code is also complicated. So it is possible that I have an error in there that I don't know. But I do everything I can to to avoid that. And I will work to be transparent with you on areas where I'm less confident or I have a knowledge gap. Or the law itself is unclear, which is also the case sometimes. So part two, where to give. And this is an area where a lot of EAs are on this call. These are not foreign ideas for you, but for other folks, what will matter more than how you give and how much you give is where you give. That by far has the largest impact. So it's important that you think about it. So you can look up effective altruisms or any more about different aspects of giving. But here are four key components that you want to think about. One is the impact that this is actually do something meaningfully important, the charity that you're giving to. Is the charity neglected? So the idea of does you adding more of your money to that charity, does that have a good kind of, is it reaching the point of diminishing returns? Can they use more funds if they can't? Or there's a bunch of attention there already, and you have diminishing returns, then it makes it less appealing. Tractability, like can it actually work, is what they're doing feasible within that charity. And then the scale, that is can it affect a large number of individuals, whether people, animals, whatever cause area, like whatever individual is for the charity that you're looking at. And of course, the shameless plug, the executive director for the Center for Action Science, wonderful charity on reforming democracy at the very fundamental level, affects policies, making sure that we don't have a terrible government to do terrible things. So we want to maximize the world around us. It's a very efficient way of doing that by making sure we have a competent government and targeting the voting method. So now the fun stuff, we're going to talk about all about the technical aspects of giving, and we're going to go through some examples. One of the most effective ways of giving, and this is a nice one because it interfaces with a lot of other techniques that we're going to talk about, and that is with employer matching. And also, there's other types of matching too. So for instance, at every.org earlier this year, they had matching up $200 per charity. These opportunities are pretty rare. And so even if you can't do it in the most efficient ways, otherwise, a one-to-one match is really awesome. And so we should generally be taking advantage of that whenever you can and working to max that out. You can go to double your donation. That's one way to look at it to see if your employer has matching. There's a bunch of resources that met for more, which Dan Hegeman and I work on. And some of the other nice components are that you don't, like in some of these, you need to itemize in order to be able to take advantage of the tax benefit here. You don't even have to itemize on your taxes. It works for anyone who has the opportunity to do employer matching. So here we're getting to a bit more detail. So we're going to be talking a lot is a particular type of asset that you're going to be giving. And we're going to talk a lot about what are called long-term appreciated assets. These are assets that you've held longer than a year. And these are assets that have gained in value since you originally purchased them. Typically, we're going to be talking about stock. And we're talking about stock because it's a simpler type of asset. And it's relative to other types of assets. It's pretty liquid. And so that's where we're going to be focusing a lot of our attention on stock versus other more complicated assets, like real property and things like that. So we're going to be focusing more on this. So what you want to do, what you want to keep in mind when thinking about a long-term appreciated asset like stock is you want to make sure that the stock itself goes directly to the charity or what we're going to be going into later, which is a dinner advice fund. If you sell the stock and then you give the cash from the sale, you have lost an enormous amount of the tax benefits. You realize the gains of the stock that counts like when you sell the stock, those gains from the purchase price from what you got it at to the price that you sold it at. That difference now goes on your taxes as taxable income when you sell it. You do not want this to happen. If you're thinking about giving stock or using the assets from the stock, you want to give that directly. Do not sell the stock and then gift the cash that you get from the stock. This is probably, I know I'm harping on this quite a bit, but this is probably the number one mistake that I see is folks selling stock and then gifting the cash from the stock. Do not do that. Give the stock directly. How much stock can you give and get a tax benefit from it? Here, what we're talking about here, this only applies for folks who itemize on their taxes. That is, you have deductions that go beyond the standard deduction and you can make deductions beyond that. If you find yourself itemizing, this is for you. If you don't itemize and just do the standard deduction, then you're not going to be able to get all the financial benefits here because you're not going to be able to make the deduction. Even if you don't itemize and you just make your standard deduction, when you gift an appreciated stock, the nice thing about that is you still don't realize the gains. If you don't itemize, you can't make the deduction, but at least you don't realize the gains. That goes back to our number one rule. Don't sell the stock and give away the cash. Gift the stock directly. When we talk about the mechanics of gifting the stock directly, you can reach out to the nonprofit and they can give you their brokerage account information. I actually don't recommend doing that because it adds more labor for the nonprofit. I recommend giving it through a donor advice fund, which we're going to talk about more in a bit. The other thing in terms of how much you can deduct with the stock is up to 30% of your adjusted gross income. That's just with the stock itself. One thing to keep in mind is that technically you can gift more than that and you can roll it over to future years, but it's not nearly as effective. The reason it's not nearly as effective is because when you roll it over in the future years, it goes back and it looks at only the cost basis of the stock. If you've given more than the cost basis of the stock in the previous years, then you may not be able to roll anything over. Even if you are able to roll anything over, if that amount has appreciated quite a lot, you don't get to deduct any of that appreciation. That's why that 30% threshold is important and why that kind of carryover effect isn't as appealing as it initially sounds. The other thing is making sure that not only do you make sure you gift the stock directly, but also that you hold the stock for longer than one year. The reason that you hold it for longer than one year is that when you do that, then you can deduct the amount that you sell it for, which includes both the cost basis, which is the amount that you purchased it for originally, and all the appreciation. Say you hold a stock for six months and then you want to give it to a charity, your benefits are much less. In that scenario, you can only deduct the cost basis. That is the amount that you purchased it for. You don't get to deduct any of the appreciation. That's why holding it longer than a year is so important. Okay, so I think those are the main topics here. Don't sell those stocks. Don't do it. We'll get into purchasing with another asset that doesn't apply as much with stocks, and then hold that stock longer than a year, particularly if it's appreciated. All right, and like I said before, we'll get a thought pattern where we can start to apply some of the stuff, too, because I find it's hard to take away some of these things in the abstract. Oh, and the other thing, too, is I'll make these slides available on the Goody Bag part of my personal website, erinhamman.com, and I have some links on each of these, too, on the essays where they go into more depth. So we haven't talked about cash, other than don't give to the cash from selling stock because you just want to give to the stock directly. Don't give the stock. Don't sell the stock. But say the only thing you have is cash, and you either don't want to sell the stock that you have or you don't have stock, or it hasn't aged a year, and you just want to give the cash. Well, if that's the case, then you do have some benefits available to you. So, for example, this little panel with everyone is so hard to move out of the way. So one of the things is that, again, just like with the stock, being able to deduct a cash gift is only applicable if you itemize. There are some exceptions for the year 2020 and 2021. We can go over them at the end, but as otherwise, gifting cash is something that you can only deduct when you itemize. If you've given any kind of stock and you also gift cash, then the total cap between them is 50% of your adjusted risk income. If you don't gift any kind of stock at all and you only gift cash, then the cap is 60%, and you can roll them over in future years. But if you roll it over with cash, it doesn't have the same kind of negative issues as it does with stock because there's no appreciation with cash. It only goes down in value. So that's something to keep in mind. And then the main pitfall is you're giving cash. So you don't get to deduct any kind of appreciation. You really, really want to focus on assets that appreciate. That's really the way you're going to get the best kind of benefit with gifting. Cash is generally something that you want to avoid giving in terms of tax benefits. And one exception here for when you might want to give cash would be if there is some kind of matching opportunity where they require you to gift cash. So example, Facebook matching. You can technically give a stock through every.org, but if they have a small window and you don't have a chance to set that up, then you might need to give cash in the interim. And that may still be worthwhile just because that matching is so nice as an effective way of giving. So that's a scenario where gifting cash might actually make sense. So giving tools. Here we're going to talk about donor advice funds. A donor advice fund is basically a checking account that you use for charity when once you put money into the checking account or stock or any other type of asset, you can't get it out for other personal reasons. You can only give it to charities. So you think about it as a checking account that can only be used to gift to charities. And here you see the logo for Fidelity Charitable. I've interacted with a number of donor advice funds, a number of banks, most major banks have a donor advice fund. Fidelity is really the best one that there is. Every time I think about like another donor advice fund, they turn out to be crappy for some reason or another. So far, Fidelity hasn't been bad. They're also the largest donor advice fund in the world. So maybe they have, maybe there's a reason for why they got there. So why a donor advice fund? From your perspective, and I think about this both from the donor's perspective and from the nonprofit's perspective. So being in both on both ends, it consolidates giving receipts to one location. So if you're gifting to like a whole bunch of different charities, then like maybe like you got to check your email and you got like a special tax folder or something, and that's kind of a pain. But if you gift to a donor advice fund, say through Fidelity, you just go log on through your Becket account and you see all the places that you've given to and all your tax receipts are all in one location. Donor advice funds also makes stock gifts really easy. So you just particularly, so for example with Fidelity, if you have stock that's not in your Fidelity account, you can port it over and it works. If you have a brokerage account within Fidelity, it's even easier, but it doesn't necessarily have to be within the same bank. But using a donor advice fund is great for for gifting stocks. The other thing is that it makes your planning a lot easier too. So say you're thinking about your taxes and it's getting towards the end of the year, which it is getting towards the end of the year and you're thinking like, now I'm kind of like between like a couple of charities or I don't quite know yet, but I know like for tax purposes, this is going to be an important year for me to donate because I really need to reduce my my taxable income. And so what you can do is you can make your gift in that tax year and once it hits your donor advice fund account, that's your gift for tax purposes. And when you distribute that gift is not relevant for tax purposes. That's just you have complete flexibility there. And something else to keep in mind is that you can technically invest within a donor advice fund. So like normally you don't have a whole lot of options, basically index type investing, you get a little bit more flexibility if you have a whole ton of money in your donor advice fund. But for most folks that you don't get a lot of investment options. Now one thing to keep in mind is some I've had some people ask, should I go ahead and put everything in the donor advice fund and then like the appreciate, well, you can do that. The thing is all that appreciation that happens in the donor advice fund after you've given like that's not beneficial for you at all for for tax purposes. So it's best to let the appreciation occur before you put the money into the donor advice fund. That way you can maximize your deduction. So in terms of the nonprofit end, which is an end that I think about quite a lot. So there's this complicated thing that's invisible to most people outside of the nonprofit world. So people in the nonprofit world don't understand this very well. It's called the public support test. It's a complex calculation for where income comes from for a nonprofit. If that money is too concentrated from private individuals or other non-public support type resources, like outside of like other public support charities, then it counts against what's called this public support test. If a nonprofit fails this public support test, it means that they aren't able to give some of the same kinds of tax advantages to their future donors, and they have a much more complicated paperwork that they have to fill out in the future. It basically makes it a kind of a real pain for them in the future. Now if you give through a donor advice fund, particularly if you give a large amount, it all counts as public support for the charity in regard to this test. So say there's a charity that particularly for a charity that's not that doesn't have a whole lot of funds, say a charity has like a million dollars a year and you're gifting 10 million dollars. Well, if you just write them a check or if you give them 10 million dollars in stock and you don't use a donor advice fund, then you could seriously jeopardize their public support support test, and this is not something that you want to do. And even for like mid-sized donations, giving through a donor advice fund, not only will help them with the public support test, but it makes it a whole lot easier. Like as an example, like as the executive director of CES, when someone insists on giving stock, like what I have to do is I have to go through the two-factor authentication with our bank, set it up, I have to go through our policies, sell the stock, track it and everything, be able to communicate through the donor, like when we got it, what the value was. It adds a lot of time on our end. And this is like multiple people, like we have to give them the count, like I get me, our director of plan three may be involved at the same time. So this can add a lot of staff time. Don't do this. In contrast with that, when we get a donation from a donor advice fund, even when someone uses a stock that they put into the donor advice fund, what I get from Fidelity is a bank transfer, like directly into our bank account, and we just get a notification over email that we have funds in our bank account. We don't have to get a whole bunch of staff involved. It is just so, so much easier. And also another shout out to Fidelity, other banks will make it so that we have to go and get a physical check. And for some folks, it may not sound like a big deal, but in practice, it does add a bit of time, like having to go through, sign into the bank, and then go through and even remote depositing a bunch of checks, depending on how the nonprofit is set up. For CES, I'm personally the one who has to do this. And you'd much rather me do other things with my time than go through and do this procedure. So Fidelity doesn't do that, whereas others like Charles Schwab, I have no idea why we've talked to them. They refuse to make it easier. But Fidelity just does a bank transfer and no devices via email. So much easier. Again, just another kind of shout out to Fidelity for making everybody's lives easier. So on-dinner advice funds is offered by many major banks. Actually, again, I recommend you don't go with any of the other ones. I recommend you just go with Fidelity, even if your brokerage account is within a different bank. The minimum deposits have recently been removed. So Fidelity, you don't have a minimum deposit. You can just open up a dinner advice fund. You don't even have to have any money. Just open it up and it's ready for you in the future. Another horror story I heard about from someone else is that from another bank, I think it was Vanguard maybe. The person had given everything from their dinner advice fund and the bank just closed their dinner advice fund. They didn't leave it open. And so next time, they have to make a gift. They have to reopen a new account. So nonsense. I have no idea why these banks are making it so hard. Fidelity seems to be the only one getting it right. And Fidelity pays me nothing to say this. They've just done a really good job. They make my life easier. They make your life easier. Just use Fidelity. And there are some small fees with Fidelity, but they're pretty trivial, particularly if you use any kind of investment stuff, it'll pay the fees. So those are trivial. I wouldn't worry about the fees. Yeah. All right. So that's about dinner advice funds. Use dinner advice funds. They're wonderful. Don't make things harder yourself. Don't make things harder than nonprofit. So the other thing we'll talk about just briefly is plan giving. So plan giving is way easier than most people think. So a lot of times the people think of plan giving to think, oh, well, I've got to write out my will. I've got to get some people to watch me sign a document. I've got to get some in person with a stamp to also watch me sign this document. I have to pay an attorney. It's such a pain. It's way easier than that. In fact, I would say that that route not only is it more laborious, it's also not as efficient with giving as well. What I recommend normally with giving is thinking about your financial accounts. So here, talking about your brokerage account, talking about your savings account, talking about your retirement accounts, all those accounts, when you go into your login on your bank online, you can set a beneficiary for all of those. And when you set a beneficiary, that can include a charitable beneficiary. Now, one thing there is that you can have a go directly to a charity itself. Another way to do it that's a little bit more sophisticated is to have your beneficiary be your dinner advice fund. So within the dinner advice fund, you can set a beneficiary within the dinner advice fund. So when you die, the funds from the dinner advice fund go to the charity of your choosing. Now, when you set the beneficiary for other accounts as your dinner advice fund, what you do is you simplify the process. Because over time, the dynamics of what's a good place to give to, or what's not, or your own personal preferences can change over time. And so you don't want to have to go through and change the beneficiary for every individual account because it's pretty laborious. But if you make your dinner advice fund the beneficiary, then you only have to change the beneficiary in one place. That makes it a bit easier. Some places like aren't as big about having a dinner advice fund as a beneficiary. So you may need to check with them first. Others, fortunately, are. It shouldn't make a difference from their perspective. I find that they're just being annoying when they don't do it. And of course, if you do fidelity, if you have your accounts in fidelity, then of course, it's way easier then. But other places should also allow you to do that. One thing too is, so for example, if you have life insurance through your work, right now I think it's not taxable up to $50,000 with life insurance through your work. You can also make a charity or your dinner advice fund the beneficiary for life insurance through your work. I personally do that as well. So that's another way to deal with that. This is setting a beneficiary is super easy to do. You're just going into your account settings. The other nice thing about setting a beneficiary within your accounts, technically these are called payable on death accounts, but it's just like your regular account where you're just setting a beneficiary is that you don't have to go through probate. When you go through probate court, say, which is normal through a will, it can take quite a long time. You have creditors to deal with. You have all kinds of obstacles there. You sidestep all of that when you set a beneficiary within your financial account. It's just way easier. So set beneficiaries for all your financial accounts. You can, of course, like also if you have other dependents or loved ones that rely on your financial resources, you can set more than one beneficiary. So you can keep that in mind. And I would also recommend using your dinner advice fund as a beneficiary for simplicity. Okay, cool. Now we have a problem set. So here we're going to talk about Tami. We're going to say Tami is really big into tech. Maybe she bought Tesla stock or Apple or something, went way up. Good for Tami. She made a great investment. And so that would say she bought $1,000 worth of stock. Again, we call that our cost basis. And the stock goes up a ton. It's not worth $100,000. So we say Tami donates all $100,000 to the center of production science. And Tami's adjusted gross income would otherwise be $150,000. So she sold all her stock. She's got all this cash now. And she just gives it to CES. Now, what has Tami done wrong? And what has Tami done right here? And what should she have done instead? This is an open question to you. Tami, she bought $1,000 worth of stock a bunch of years ago, now worth a whole bunch of money. She sold all that. And she just gave it away in cash. What does she do right here? What does she do wrong? So. And her next thing, her investment seems like a right thing. Yeah, she did that right. Yeah. But then the first thing that you've been hammering on, don't sell and give cash. Just donate the stock. So that's obviously the place to start, but she did wrong. I think also it seems sounds like from what you were saying, with $150,000, she could only reduce 30% by donating stock, right? Or claim deduct 30% if she donates the stock. So she should probably, whatever 30% of $150,000 is what that's live. Yeah, whatever that is. Yeah, $50,000-ish, something like that. That's what she should give. And then she could give those over two years, I guess. Is that like the recommended thing? Like give $50,000 this year, that's the amount or whatever, or $30,000 or whatever it is this year. And then the next year, do the same. Yes, as I mentioned. So I think you got two big ones. There's maybe one more, one more. Anyone else want to? So, Adam mentioned poor Tammy, she sold the stock. She did the number one Cardinal Sin, she sold the stock. And then also she is relying on a carryover, which we know is not nearly as good because she's going to hit that 30% threshold. Actually, here, she's going to realize the gain of $100,000. Her adjusted gross income is going to be $250,000, but it's going to be in cash. So she's not going to hit the threshold because she's giving in cash. Right. So she corrected the first issue, then her AGI would still be $150,000, right? Correct. Yes. Right. And so then you're going to talk like, let's assume she corrects the first issue. Then the next mistake to correct is not to give it all away, but to like figure out what's 30% of her AGI and give that much away today. Yeah, you're right. Yeah. If she gives it in cash, she doesn't have, well, she goes a little bit over, but she can carry it over. But if she does it correctly and just gifts the stock directly, then she thinks about the threshold. There's one other thing here. There's the 30% threshold when she gifts correctly by gifting the stock directly. There's a threshold. Gifting the stock directly. There's one more thing. You could give to a donor-advised fund instead of giving it directly. That's right. Yeah. Like, why force someone to go ahead and get paper and ink involved and having to get other people involved wasting staff time? Yeah. Use a donor-advised fund. Yeah. Having donated stock without a donor-advised fund directly, it is like a pain in the ass. And why would you want to even do that to yourself, let alone like the charity that you're giving to? I totally agree, Adam. It's terrible. Don't get people to stop doing it. Get them to open donor-advised fund accounts, particularly through fidelity. All right. So I think we got a lot of this. So she sold the asset instead of gifting it. Tammy, what were you thinking? We'll do better next time, Tammy. And then she didn't use a DAF. And then the other component is the 30% threshold. And what she should have done instead, she should have gifted the 30% in stock through a DAF. And she should have also maybe checked for employer matching too. That would have been another appropriate step. And I'm thinking about and giving it directly, using a DAF, the 30% threshold. Then there's like one other thing which I actually did not mention earlier. And that is she has some flexibility here with her giving with the stock. And so say she really wants to, she doesn't want the, say she wants to just get this all out of the way and done. And she actually intends on giving another 30% with some other income or some other stock in the next year. And she's going to run into the same 30% thing issue in the future. If she finds that she's going to consistently go about that 30%, another tactic that she can use is she can give to a 501c4 charity. So there are a number of charities out there that do a bit more lobbying that are great causes. And when you gift to a 501c4, you aren't able to make a deduction when you give to a 501c4. But if you're already in a situation where you max out the amount that you can deduct, that's no longer an issue. Now what you care about is not realizing your gains. So if you gift stock directly to a 501c4, unfortunately in this case, like you do actually have to do that kind of pain in the ass transfer through your bank, because you can't do it through a dinner advice fund anymore when you give to a 501c4. But you can give the stock directly to a 501c4 and not realize the gains. So she can still get the benefit there of donating the excess to the 501c4 and not realizing the gains. Of course she doesn't get the deduction, but she wasn't going to get that anyway. So that's another kind of like technical note. If you're thinking about 501c4 charities as something else as a potential beneficiary for charity. So that's Tammy. Now we're going to talk about crypto giving. And we'll have another back pattern and a scenario there. So again, just kind of like harping this just push this really deep. And that is don't realize gains. Just don't do it. And so you have Bitcoin, Ethereum, or some other random cryptocurrency. Do not sell the cryptocurrency. Like you realize all the gains that way. And also do not purchase another cryptocurrency with the currency that's appreciated. You will also realize the gains that way. When you purchase an asset with another asset, the original asset realizes all the gains. So don't do that. And that's something that is a bit more particular to cryptocurrency. So things that don't trigger a taxable event when you give to a 501c3 and when you give to a 501c4. Just don't sell it. Don't sell it. Just gift it directly. And of course, use a general advice fund or some other mechanisms that we're going to talk about later. So what to be aware of, you want to gift the appreciated crypto directly. That same thing in terms of holding it longer than a year that applies here as well. That applies to all assets. You want to hold it for longer than a year. Again, here only deductible. If you itemize, there's a roll over 30% roll that applies to all appreciated assets, pitfalls to avoid. Just going to keep saying it. Don't sell and then donate. That's the number one mistake I see. And something that's particular for crypto, another mistake I've seen. Don't use crypto to purchase another cryptocurrency if you can avoid it because that is a realizing event. So that's a taxable event. You realize all the gains. And then the same thing about the one year. If you hold it for less than a year, you don't get to deduct the appreciation. Something else that's particular to cryptocurrency is you have, say you bought Bitcoin or Ethereum at a whole bunch of different times. Maybe you bought it from the same exchange. Maybe you bought it. You acquired it in a different way. If you're storing all this in the same place, say you've got a bunch of dollar bills and you put it in your wallet and you want to give someone like a particular dollar bill or something like that. It's all kind of shuffled around. You don't know which is which. Well, when we're thinking about cryptocurrency, it gets kind of the same idea going on. And so we realize that if cryptocurrency is very volatile, it goes up and down all the time, and so it can be really important sometimes to pick the exact set of coins that you want. And if they're all mixed up in the same exchange or in the same wallet, then that gets really complicated. And if you haven't kept your records, it's going to use a principle of call it first and first out. That may be fine. It may actually work out fine for you and your situation, but there may be instances where you really want to specify which set of coins you're talking about. And to be able to do that, you need to record these four pieces of information. And that is the date and time each unit was acquired. I would recommend going down to the second on this as well, just because it's so volatile. Your cost basis and the fair market value of the unit at each time it was acquired, when you're selling it, you want the exact time again down to the second. And the fair market value of each unit when it's sold or transferred or whatever. And if you don't do that, it's going to, your accounting is going to assume first and first out principles for that. So this is again a little bit more specific to cryptocurrency. Make sure you have really good record keeping. And some exchanges are getting a bit better about doing some of this automatically for you. But personally, like I have a spreadsheet for my crypto accounts where I record the exact second and all this other information to on a spreadsheet, just to be sure of your case. And again, like looking at the, say you're looking at that 30% and you're going to go over that 30%, particularly if you're dealing with an asset that's appreciated quite a lot that's kind of like out of proportion with your typical adjusted gross income. You can gift 30% one year, you can gift 30% of your adjusted gross income the other year. And you keep doing that again, like we do that carryover thing. And we are no longer able to deduct all that real all the appreciated gains we can only deduct the cost basis if we try to carry it over. So we've got to make each gift separately if we want to try to keep ourselves in line with that 30%. But say we want to expedite our giving and that 30% is going to be a barrier. You can do a couple of things. One is you can just say like, you know what, I think this charity is really important, I'm just going to go ahead and give to them anyway, and not get the same kind of deduction. Still, you're getting the tax benefit of not realizing the gain. That's still really big benefit. But you don't get the deduction and there's technically that carryover, but it's not not very appealing. So again, what you can do just like you can with stock with cryptocurrency, you can give to a C4 organization because once you get over that 30%, because again, you're not getting the deduction anyway, your big tax advantage now is avoid realizing the gains. So you can do that when giving to a 501 C4. Now keep in mind this approach may not work with other types of organizations, say 527 organizations. The law actually appears less clear on this. I did try to look a little bit more deeply into this to get a clearer answer. But I've seen some places look at it and say that gifting to a 527 is a taxable event. So I would stick with the 501 C4 unless you get really good information to the contrary. So what kind of mechanism do you use to give when using cryptocurrency? So there are a bunch of exchanges out there. I know there's also a new effective altruism organization that is helping with gifting with a subset of some EA organizations. These are some other ones. If you can just use something like Ditter Advice Fund through Fidelity Charitable, that's super convenient. Their fees are really low, makes it pretty simple. They do give you some paperwork to do, so that's something to keep in mind. It's not quite as easy as gifting stock. So they make it kind of a pain. And then if you want to give to a C4, you can use InGiven. They do have and here I, so like before when I was talking and saying like, hey, like, you know, it's kind of like a pain when you give stock and like it's kind of complicated. We'll multiply that by a factor of 10. And like now that's what's cryptocurrency. Don't do that to your favorite nonprofit. Don't make them be an expert in cryptocurrency. Make it as easy as possible for them. That's why you're using these intermediaries because if you give it to them directly, like they may make a mistake because they're not used to doing this, like they may lose the entire gift potentially. There are lots of things that can go wrong with crypto transfers when you're dealing with someone who doesn't work in this space regularly. So even when you give to a C4, I would also recommend using that intermediary if you can. So InGiven is a platform that you can give to a C4. It's not a dinner advice fund. So something to keep in mind. And also the when you see this column that says large gifts, okay, that that's answering the question of whether they're going to be able to work well with that public support test that we mentioned earlier. So the ones that say yes, you can give very large gifts, like six-figure, seven-figure gifts, and it's not going to be an issue for the nonprofit. Something else to keep in mind is that every.org looks really appealing now. So at first, in terms of coin versatility, they seemed a little bit more limited. But now when you, I wish they were a little bit more prominent about this because it's such a nice feature when you go and dig into their FAQs within their site. And you indicate that you are interested in giving more than $5,000 for the cryptocurrency. But it's say it's not like one of the main ones. If you reach out to them and say like, hey, like I want to give a six or seven-figure gift, but it's with this more obscure cryptocurrency, they are much more willing to work with you there. And half a percent for the fees is really low for this and for them to be able to handle that. So every.org is looking really good in that respect. All right, so now we have an application problem. So we get to talk about all this. So we have Kerry. So Kerry has bought a bunch of different crypto before, including Bitcoin. She doesn't keep a real close track of it. And she bought $1,000 worth of Bitcoin back when it was $250 sometime in 2015. It's increased 200 times that. So now it's worth $200,000. And Kerry, she's so excited and she just sells all of that Bitcoin. And she just got a checking account, just full cash now as a result. So what Kerry does, it's all excited. She gets out her checkbook and she writes a check to CES for $200,000. And keeping in mind here that Kerry's, we say that Kerry's adjusted her income would otherwise be $335,000 without the sale. She works in the tech sector and she doesn't, she's like super killer at her job. They pay her a whole bunch of money. So what has Kerry done wrong here and what she did right? And what should Kerry have done instead? So open it up to the floor. That sounds like she didn't keep good records for one thing, like you said, right? I know. I know. She's going to have to use, what's she going to have to use as a result of using poor records? FIFO, right? Yep. First and first out. That's right. Could she use the blockchain as the record and figure that out if she wanted to post X-Post? Like before trading, but obviously if she hadn't recorded it, she might be able to like look it up actually on the blockchain. Like that seems like the benefit of the public ledger, right? You don't actually have to keep track. The ledger keeps track for you. As long as she's able to verify it somehow, she can do that. But I mean, if it's more challenging than having done it previously, unless she really knows what she's doing. Yeah. That's a good point. Yeah. If we, what we'll say, Kerry is like maybe just like kind of like an average cryptocurrency person. She doesn't know how to do that. She spent all her hours getting really good at programming. Yeah. I think someone else should be answering these questions. I've been answering. I was just going to say she also sold instead of like donating through an intermediary. So she realized the gains when she didn't have to write. That's right. Yeah. Yeah. She got her checkbook out. And the other thing to note with the intermediaries here is that fidelity and every.org as well as endowment. Those are charities within themselves. And so the same thing applies as when we're talking about donor advice funds. So when you give to a charity, that's when the tax event happens. So that is she gets a deduction right then when it goes through that intermediary. All right. So she, she sold everything. She's got everything in her checking account. She didn't use an intermediary. And then didn't get the asset directly rather than cash, which is a mistake of the realizing the gains. Right. Right. And then there's one, one more. So say, so we'll go to that one. Yeah. So this is, this is the big three. Now, what could she have done instead? So these are the, if, if Carrie was looking at this with more informed eyes, like what, what would she have done instead? I mean, wouldn't she go after the, those five charitable organizations that you provided fidelity, that end amount, and not cash out and not swap currency for currency, but go through those charitable 401 C three C four. Right. Yeah. So the charities themselves, the intermediaries are C threes. So that would be the appropriate way, particularly if she's doing something in very common currency such as Bitcoin, say she's using like Dogecoin or something like that. She probably has to go through every.org. And now every.org on their website, I believe they don't accept Dogecoin, like right off the bat. But if she says like, Hey, like I'm making a six-figure gift, that's going to be enough to be able to have a conversation with them to say where she's probably going to get the allowance to be able to, to donate that asset through them. Now, the other thing is she hits that 30% threshold. So what is she going to do about that? She has a long-term appreciated asset that is greater than 30% of her adjusted gross income. How does she deal with that? She definitely split it up over more years to get more deductions, but like also probably part of it should be about like, which one she's going to deduct this year based on how much they've appreciated versus you want to be strategic. I'm not quite sure how that strategy maps out there, but it probably makes, it's probably important which particular coins, because they're not totally fungible. She is donating because they will have appreciated different amounts. If there's a certain coin that's maybe more volatile than another, that's one aspect that she can use in terms of picking coins to donate. And then the other component is it's about that 30%. Obviously she can technically carry it over to multiple years, but we know that if she does that, then she only gets to deduct the cost basis, which may not be carried over if that cost basis doesn't exceed the 30% of the adjusted gross income of the first year. So splitting it up is an approach. And then also if she's in a situation where she's just thinking like, you know what, I can do this in future years too, and I'm going to hit that same kind of 30% issue. What she can do then is she can just say like, you know what, I'll give it a C3 anyway, and because I can't get anything above the, well, let me see here. So she goes to a C4, that's the, because she's not going to be able to get the deduction anyway, and she avoids realizing what the gains by giving to the C4. One other thing I was thinking about just in the moment is that, well, yeah, I guess another strategy just worked. Okay. So these are the main ones. Just to be clear, because I think I, to see if I understand what you're saying, like there's no particular tax advantage to giving to a C4 once you've realized your deductions. It's just that the disadvantage versus a C3 is gone at that point. And so if you really prefer a C4 over a C3, that is the time to do it. That's what I think you're saying. Is that correct? That's right. Yeah. Yeah, because you still get a tax advantage giving to a C4. And that tax advantage is that you don't realize the, you just don't get a deduction, but you don't realize the gains. So I didn't kind of question that too. Sorry. So once you hit the 30%, so say if I give 30% and appreciate assets to my death, if I then give more appreciate assets to my death, that also should not be realizing gains, right? I just don't get a deduction. That's right. Yes. So like basically, once you get above 30%, you know, like you said, if you've had significant appreciation over your cost basis, you don't want to be cashing that out. But at that point, it's basically like whatever you give it to, it's all the same. But in either case, it is important to not realize the cap gains there. That's right. Although I would maybe give a little nuance there that you may realize gains if you give to say like a 527 organization. But when you give to a C3 or C4, you're not realizing those gains. I had a quick question. If you had $100,000 that you started with, and then at 5x, is there a way to take, pull out the $100,000 that the original investment, let the unrealized gains ride, and then donate your original investment without any tax implications? Is it possible to do that? The reason for that is because you have the cost basis and the appreciation are intertwined within each individual unit, so you can't separate them. So say like you have like a stock, like 10 stocks of Tesla, and it's gone up so that like your cost basis is roughly 10% of the total amount. You can't just like refer to one stock as your cost basis. They're all intertwined. So within each individual stock, 10% of that stock's value is the cost basis and then that other, that remainder is the appreciation. So they're intertwined within each other. But in that example, you could just get 10% of your stock and it sounds like that would be basically equivalent to what was suggested, right? You can't gift just your realization and you can't gift just your cost basis. Right. Like say that you bought some, say you bought $100,000 and then it went up 10x, then what you can do is not catch up any bit, but just you can just donate 10% of it and you won't incur any cap gains tax and you will give to the charity, right? So like if you were going to withdraw money and then donate it, I mean this would be, you could give 10% of your position to the charity without realizing any tax. Yeah. I mean, anytime you gift an asset, including an appreciated asset, when you gift that to a charity, you're not realizing any of the gains. So I think those are all those. And now to the end, so just for questions, and I've got like some quick takeaways. One, where you give matters most, don't sell and then give. Just don't do it. Don't let other people do it. And you give directly to the org or the Dinner Advise Fund and you should almost always use a Dinner Advise Fund preferably fidelity. And when you're gifting appreciated assets, make sure they're held for longer than a year. That way you can deduct the appreciation and not just the cost basis. Keep good records for your crypto and just make things easier for you. Be mindful of that 30% threshold. You can break it up over multiple years. We also talked about different strategies when it goes over, such as like gifting the spillover to say a 501 to the 40. And consider the type of crypto when you're giving and we have some different channels for doing that. You really strongly recommend you use intermediary because when you gift crypto to a nonprofit and they're less savvy, you could just lose everything. And so using an intermediary is going to be quite a bit easier even if you have to pay some small fee. And I have a ridiculous number of essays on technical aspects of giving on my personal website. So you can always use that as a reference. And the essays themselves are littered with links so you can find original sources to everything. And I also recommend using this as something that helps you have a conversation with your personal financial planner. Not all of them are really savvy on this unfortunately. And so this can kind of make that conversation a lot easier. And then of course, you can always use these tactics to give to CES preferably through a dinner past that. Any questions? I have a quick question about the death fees. So you mentioned like 0.6% non-fidelity. And I don't remember how this works, but is it 0.6% when you put assets in or when you take them out? Or is it just like first of the year they just charge you 0.6% or do you know how that works? I don't think I have a confident answer. Over the balance of the full year or something like that. At least with Schwab, I think it used to be that way. But I don't know for sure 100%. Okay. Yeah, that could be interesting. Because if it's like 0.6% annualized, I guess then you're incentive us to donate sooner. And I guess like part of what I was afraid of was maybe it's like there's one day a year where your fee kicks in, right? And then if you give before that, you could potentially save on fees. But I'll try to look into that. Yeah. I mean, personally, I haven't. So obviously I use Fidelity Charitable for my individual giving. I haven't really noticed fees come into play for me. I allocate how they're invested through their different index options. But also anytime I put money in my general advice fund, it leaves it pretty quickly. So it may be that it's not in there long enough to experience some of the fees that they indicate. And then the other thing too, like they, I think one component is like either that or $100, whatever is lower. I think maybe their fee now. To my knowledge, I haven't ever been hit with that. But again, I think it's just because I don't need funds in there that long. Erin, I had a question in the chat. Kind of crypto specific. If you're exchanging crypto for crypto, this is like a no-no. Is it still the case if you're doing it between like derived currencies on the same chain, like say you're swapping to ERC 20 coins or something like that? Do you know? I would suspect that it has similar effects, but I can't say for certain. One question I have. Thanks for organizing this. I had a quick question about about kind of giving to every.org and just going to H&R Block next year and hoping they understand that with those $100 Bitcoin donations main. Have you given in past years and is it relatively straightforward for people to understand that as long as you have like the every.org receipt that it's not a purchase that you've made, but that it's a, which you should be taxed on, but that it's a charitable gift, even if you're not going to deduct, even if you're not going to be on the standard deduction, that's a charitable gift that you shouldn't be taxed on. So is a question that when you put money into your every.org account, whether you can evidence that that's a gift? Is that the question? Exactly. Basically, if you give, you know, $100 to a charity through every.org and then you have the every.org receipt at the end of the year, is that like sufficient evidence to, when you file your taxes that, oh, it's not that you are doing some shady crypto transaction that you should then be taxed on because the value had increased since you purchased the coins. Yeah. And one thing, again, to train mind on, every.org is itself a charity. So the tax, like the tax implications of the deduction occurred once you put money into the every.org account. So just like a death, like a lot of the principles apply there. When you distribute the funds is independent of the taxable event of when you made the gift. So when you put money into your every.org account, or when you transfer it or using crypto or whatever, that's the gift itself. That's for tax purposes, that's the gift. Now, when you distribute it after the fact, whenever that occurs, that's independent of for tax purposes. So just like for the donor advice fund with fidelity, say you put stock or crypto in there, when you do that, for tax purposes, that's your gift for the year. Whenever you did that, that timing, that's what's important. When you distribute it out of that count, you can do that whatever. In fact, there's some controversy about donor advice funds for some people who are just kind of like leave it in there for a long time and don't do anything with it. There's some controversy about folks who do that, but they've already gotten the tax benefit. But they can, right now, there are new laws in the books that say you have to distribute money from your donor advice fund within a specified period of time. There's been a lot of talk about making it so that there's a limit so that you do have to give a certain percentage within a particular timeframe within your donor advice fund. But right now, there is no timeframe limit. Great, thank you. One quick question I had was regarding selling stock. I just wanted to double check that, I think there's one case when it might be okay. For me, as someone who works in tech, the bulk of my compensation is in equities. Basically, I receive restricted stock units, and whenever I get a disbursement of those, my employer sells off a portion to pay for taxes. As I understand it, the amount I receive, if I sell them right away before they've appreciated, there's basically no additional tax on those. That's what I tend to do because I'm not comfortable holding that much money in a single stock. And it seems like that's one case when it might be okay to sell instead of donate directly. For that, I think a lot of it's going to depend on what the cost basis is of the stock when you acquire it. And I think that's maybe a very bit. And for types of restricted stock, that's going to be a little bit more challenging versus stock that anyone can purchase on the exchange. Fortunately, other places like Fidelity Charitable, they can handle more complicated assets like that. But I would be hesitant to say anything personally about being able to sell the stock and then gift the proceeds. Intuitively, it feels to me like it violates that rule. And I don't have a clear way out in my head of getting around that violation. And I'm just worried about the difference between the cost basis and the fair market value. Now, one thing to keep in mind, too, is that sometimes you may have some extra paperwork to do with more complicated forms of assets where you have to get someone to assess the value of the asset that you're gifting. So that may be something that some folks experience. You'll surely experience that with cryptocurrency. I got to run, but thanks for the presentation. Yeah, thank you. Any other questions? One question. If you're giving stocks, and you don't always have to do this beforehand, but is it generally better to buy a diverse portfolio of individual stocks versus an index fund? Because if one individual stock appreciates a bunch, if you bought all the 500 individual stocks that make up the S&P 500, and one of them goes up, obviously the most, could there be tax benefits to doing an approach where then you just donate the most appreciated stock and get a proportionally higher amount of tax benefit from that? Yeah, that's a bit more sophisticated. That's also the same approach that I personally do. There are pros and cons of this. One is you have more risk because you're not diversifying in the same way that you can with an index fund. So there's obviously more risk there. But you do get to utilize some of the volatility there as well. So if you have an outlier stock that has appreciated quite a lot, appreciated assets is really the name of the game in terms of really being able to maximize these deductions. So it does give you the ability to have the potential to utilize more appreciated stocks. Because by purchasing stocks individually, you're really asking for that volatility too. And then the other related question, like if you use something like a donor-invised fund, like if you transfer stocks into that, does it, like if you have something like an index fund presumably the oldest stock, the first stock you purchase in the index fund is appreciated the most, do they make it fairly, or I take it for the most appreciation you'd want to sell the portion of your index fund that has, or like the funds that you put into that that appreciated the most, do they make that fairly easy to do that? Or is that kind of complicated? I'll say that fidelity does. Okay. You may experience different levels of how easy it is with other banks, but I think fidelity does a good job. They even have a tool that automatically identifies the most tax-efficient stocks to give. So they just, they're a bunch of overachievers over there. Yeah. They also have insanely cheap indexes too. This talk was brought to you by Fidelity. No, it wasn't. But not sponsored. If there are no more questions, I can go ahead and stop the recording.