This act of portfolio sabotage was self-inflicted; I greeted the news with a smile. The hundred grand is no longer mine, but I now have the opportunity now to use it to do some good in this world that my family and I live in.
The easiest way to donate to charity is to simply write a check for cash to your favorite charity. As long as you are giving to a bona fide 501(c)(3) charity, and you receive a receipt, you can include the donation in your itemized deductions to reduce your income tax.
How can you donate more to charity at a lower cost to you? By donating appreciated assets. That is, stocks or bonds or mutual funds containing them that are now worth more than you paid.
The reason it’s more advantageous to give appreciated assets than cash is the elimination of capital gains taxes.
Donating appreciated funds rather than selling and donating cash saved me $22,000 x 28.65% = $6,300. Then, of course, there is the benefit of deducting $100,000 from my taxable income.
The benefit of growing the fund while working is obvious. Our tax code makes it much more beneficial to give when your income is high.