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Giving back this holiday season

dvm360dvm360 December 2023
Volume 54
Issue 12
Pages: 52

Here is how you can utilize a donor advised fund to give back to your community, and yourself

annaav / stock.adobe.com

annaav / stock.adobe.com

Nonprofit work has always been an interest of mine, and I have served in multiple organizations since I was 20. When I was young, it was about donating my time, energy, and attention because that was what I had a lot of. As I have grown older, it has shifted to more a donation of my mind and money.

I love being involved in nonprofit work, not only because it embodies the selflessness of a group of people coming together to lift communities that are less fortunate, but also because it is the centerpiece of my moral and religious belief system.

If there is one thing veterinarians know well, it is how to give of themselves. Generally, this is a great attribute of people in veterinary medicine and one of the main reasons I am drawn to always wanting to do more for people in the field. Of course, veterinarians sometimes experience this moral pillar that creates unhealthy boundaries of self-sacrifice that feed misplaced emotional needs. Everything should be done in balance.

I have found that I often want to give money to a 501(c)(3) organization for the tax deduction, but I am sometimes unsure as to which organization. There is a time limit when it comes to getting that deduction because you must give it in the tax year that you want the deduction to be applied. This makes it hard to get the deduction when you are not sure where to send it.

In the past I have given to multiple organizations in a year and found tracking down statements for my accountant to be difficult, especially if I could not remember all the organizations that I had given money to throughout the tax year. Sometimes I have found myself wanting to give appreciated assets to avoid the tax for when I would sell it but still be able to get the deduction at the value of the assets.

In comes the donor advised fund (DAF). You can give money to a fund that is held at a 501(c)(3) organization to effectively eliminate all the issues mentioned above. You can open an account and contribute money or assets of any kind to the account and have it count as a tax-deductible contribution to a 501(c)(3) in the year that you made the contribution. This allows a person to get the deduction in the year 2023 and invest the money in the fund however they would like and, at some point in the future, give out of that fund to other 501(c)(3) organizations whenever the opportunity arises.

Also, by using a DAF you can give to multiple organizations but not have to worry about the statements they send you at the end of the year. You have already gotten the deduction when you deposited the money into the DAF.

You may contribute appreciated assets where you can deduct the current value of the asset regardless of how little you paid for it to begin with, thus avoiding any tax on the sale of that asset. If you give to 501(c)(3)s this would be a great thing to explore and consider using to simplify your giving and make it easier to tax plan using these deductions even if you do not have a specific organization in mind to give to at that moment.

CJ Burnett, CExP, has always had a deep interest in the financial arena. This began at age 16 when he attended an investment symposium in California. From that point on, Burnett became incredibly curious about financial topics and devoured any information he could get from books and periodicals to learn and understand the world of investing. He started focusing on working with veterinarians in 2014 and cofounded Florida Veterinary Advisors as a result. Over the years, Burnett has had success working with veterinarians and business owners on structuring a financial plan that gives them the most control over the results they are after. Burnett does not want to only help people with their financial plans; he wants to change what’s possible for them; to show them how to master the “short game” for them to win the “long game.” Burnett speaks at national conferences, is involved in many national veterinary associations, and is a host on the Smarter Vet Financial Podcast.

DISCLAIMER: Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice. Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Florida Veterinary Advisors is not an affiliate or subsidiary of PAS or Guardian. Florida Veterinary Advisors is not registered in any state or with the U.S. Securities and Exchange Commission as a Registered Investment Advisor. The individuals associated with Florida Veterinary Advisors do not maintain specialized licenses or qualifications for the financial services provided to veterinary professionals. CA Insurance License #0K79676. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. 2023-164323 Exp 11/25

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