Starting an account for donations in kind (paying LDS tithing with stocks)

[docwalk76]

Silly question for those who pay tithing in kind.  Looking to pay tithing in kind but trying to figure out the best way to get started.  Currently write a check every month and send the cash in.  Should I just put that same money into a taxable account each month in a Bogle-esk portfolio.  The problem is needing to wait one year to transfer the funds.  So even with a bull market would need to wait more than a year to pay last years tithing, feels a bit weird.  Or just wait until we have a sizable taxable account from savings and continue to pay tithing monthly via check.  This seems like a waste of potential tax savings but the first option feels strange to wait a year or more to pay tithing with the risk of a bear market and having to find the funds from somewhere.  Hoping to get some ideas.  Thanks.

[jfoxcpacfp]

Giving appreciated property is an excellent way to tithe, not just in the LDS but for any organization. Have you considered setting up a Donor Advised Fund (DAF)? You get to deduct all contributions to the fund on the front end (stocks, cash, funds, etc.) and donate on your own schedule in the future. This would allow you to front-load donations in a high tax year to distribute over future years. It is a very flexible tax controlled vehicle for those who are charitably inclined, particularly those with high incomes.

[The White Coat Investor]

docwalk76 wrote:

Silly question for those who pay tithing in kind.  Looking to pay tithing in kind but trying to figure out the best way to get started.  Currently write a check every month and send the cash in.  Should I just put that same money into a taxable account each month in a Bogle-esk portfolio.  The problem is needing to wait one year to transfer the funds.  So even with a bull market would need to wait more than a year to pay last years tithing, feels a bit weird.  Or just wait until we have a sizable taxable account from savings and continue to pay tithing monthly via check.  This seems like a waste of potential tax savings but the first option feels strange to wait a year or more to pay tithing with the risk of a bear market and having to find the funds from somewhere.  Hoping to get some ideas.  Thanks.

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Remember the point of using donations in kind instead of just cash is to get rid of appreciated securities without paying capital gains taxes on them. No appreciated securities? Then no point in doing this. The charitable donation deduction is precisely the same either way.

Get the form from Vanguard. Fill it out. Sign it. Send it to the LDS church. A couple of weeks later the shares disappear out of your account. Then you need to look up the value on the day they transferred for tax purposes.

Here's the form for mutual funds: http://www.vanguard.com/pdf/fgfs.pdf

Here's the form for ETFs or ETFs AND mutual funds at the same time: https://personal.vanguard.com/us/litfulfillment/ELFMainResults?cat=MAFM&subCat1=COLE&subCat2=CGIV (might have to log in, it's called letter of instruction for gifts of securities)

Best way to get started is to use shares you've already owned for a year that have appreciated. If you don't have a significant taxable account, this doesn't work very well. But as long as you've got $50-100K+ in there, you just give what you put in there last Fall and use your tithing money to buy new shares this Fall. You give shares purchased last year, but you give enough of them to cover the tithing "bill" for this year.

I haven't bothered with a DAF. There are additional costs. It can be useful if you want to get the deduction this year but not actually give the money until later.

Hope that helps. Here's some other helpful links:

http://tech.lds.org/wiki/Donations_in_kind

https://www.ldsphilanthropies.org/gift-planning/what-to-give/assets/securities/procedure-for-donating-securities

And the address to send the form:

Donations-in-Kind Rm 1514

50 E North Temple

Salt Lake City UT 84150

[docwalk76]

Thanks.  That helps. I thought that would be the best way.

[jfoxcpacfp]

Crixus wrote:

Does anybody want to chime in here? Is this a sign or what?

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This is the Beginners Helping Beginners section.

[PHANTASOS]

The White Coat Investor wrote:

Get the form from Vanguard. Fill it out. Sign it. Send it to the LDS church. A couple of weeks later the shares disappear out of your account. Then you need to look up the value on the day they transferred for tax purposes.

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The forms are cumbersome.

The better way is to set up voice authentication with Vanguard ("at Vanguard, my voice is my password"), then you can call them and have them transfer the shares to a church account (which account number you can get from calling the donation-in-kind department).  The shares usually leave your account the next business day.

Also, you send a letter to the donation-in-kind department with your info and what kind of a donation you made (tithing, fast offering, etc.) so they will send you a tax-receipt.

This is so much better than Vanguard's terrible forms.

If anyone needs more specific info, PM me.

[The White Coat Investor]

That does sound a lot easier than the forms.

[PHANTASOS]

I believe I have the easiest way to do this, which doesn't involve phone calls or snail-mailing forms. Send me a message if you want me to send you the solution I use at Vanguard.