No Result
View All Result
SUBMIT YOUR ARTICLES
  • Login
Friday, October 3, 2025
TheAdviserMagazine.com
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
No Result
View All Result
TheAdviserMagazine.com
No Result
View All Result
Home Market Research Investing

Book Review: The Tax-Smart Donor: Optimize Your Lifetime Giving Plan

by TheAdviserMagazine
4 hours ago
in Investing
Reading Time: 4 mins read
A A
Book Review: The Tax-Smart Donor: Optimize Your Lifetime Giving Plan
Share on FacebookShare on TwitterShare on LInkedIn


The Tax-Smart Donor: Optimize Your Lifetime Giving Plan. 2025. Phil DeMuth. Alpha Dog Press

Charitable giving is a way of life for many individuals and families. According to Giving USA 2024: The Annual Report on Philanthropy for 2023, more than $550 billion was donated, which includes more than $374 billion by individuals. The largest recipients were religious organizations, with more than $145 billion in donations.

Despite the generosity of Americans, most individuals give inefficiently, thus reducing the impact of each dollar they spend. This is a problem for all but the ultra-wealthy, who are likely to have an army of attorneys, accountants, and financial advisors to assist in optimizing their giving. Even many of us who have studied and worked in the financial industry for decades are inadequately trained in the intricacies of charitable giving. Textbooks in investments generally make no mention of charitable giving, while the topic is beyond the purview of the CFA Program. Even the Certified Financial Planner program makes only a limited reference to charitable giving by briefly discussing some vehicles, such as charitable lead and charitable remainder trusts.

This lack of coverage of the topic has left a void in financial planning. Fortunately, Phil DeMuth of Conservative Wealth Management LLC, a firm that caters to high-net-worth investors, has undertaken to fill that void with The Tax-Smart Donor: Optimize Your Lifetime Giving Plan.

Many of the issues that make tax-smart donations difficult result from the Tax Cuts and Jobs Act of 2017, which raised the standard deduction and limited certain deductions such as mortgage interest and state and local property taxes. With more taxpayers unable to meet the threshold for itemizing, many individuals are spending more than $1 to give $1 to their favorite charity, something DeMuth refers to as negative giving power.

Some strategies for tax-efficient donation are well known, e.g., giving appreciated assets or bunching contributions in one year. The key to doing this successfully is knowing what assets to donate and how to bunch donations. The Internal Revenue Service tax code has strict guidelines on the amount that can be donated, and these amounts differ depending on the type of asset donated and the type of vehicle used for the donation.

DeMuth has broken the book into twelve chapters covering topics such as giving by cash and check, donating securities, retirement account philanthropy, and gifts of property. Different rules and regulations guide the various forms of giving. In many cases, a charity is likely to prefer regular, predictable giving rather than large occasional donations.

The easiest way to donate in a tax-advantaged manner is to use a donor-advised fund (DAF), a vehicle pioneered by New York Community Trust in 1931. DeMuth explains that DAFs are easily created through investment company giants such as Fidelity, Vanguard, and Schwab, which will manage the money and handle all the relevant paperwork. Vanguard requires a modest $25,000 to open the account and a minimum of $5,000 to add to the account, while Fidelity and Schwab have no minimums for either.

Many of the strategies in the book apply to a wide range of individuals. The author points out in his chapter on charitable trusts, however, that they apply only to very wealthy individuals, given their cost and complicated structure. For example, a charitable lead annuity trust (CLAT) is not a charity and is subject to capital gains tax. Who pays the tax depends on whether the CLAT is a grantor trust or a non-grantor trust. Although charitable trusts are not for most individuals, it is not uncommon for universities to encourage alumni to consider them.

Throughout the book, DeMuth provides tables to compare the impact of different types of giving. Donations of property, cash, and retirement savings are all subject to numerous rules and regulations. DeMuth takes the reader through the procedures that the donor must follow to receive the tax benefits of the donation. The lesson is that the IRS is unforgiving, and mistakes cannot be undone later. Donors may think they can provide documentation at a later point, e.g., appraisals and letters from the recipient, but that is not the case.

In the chapter titled “Three Scenarios for Tax Strategy,” DeMuth takes readers through the life of a fictitious individual, Renee, across various ages and with varying degrees of wealth. In each situation, he discusses whether Renee can afford to make charitable contributions and, if she can, how she can get the most bang for each donor dollar.

The moral of the book is that charitable giving should be part of a lifetime plan, which may include waiting until it is most beneficial to give. The decision to defer giving may entail holding off until one has sufficient earnings and wealth, or until giving power is the greatest.

Some individuals may choose to wait to give because they believe they can more effectively grow capital than most charities. Recognizing this, DeMuth provides a chapter on investing for charity. Most charities struggle to generate returns, so some individuals may feel they can do better by waiting to give and investing the funds themselves. Warren Buffett has successfully used this strategy, refraining from giving in the thousands or millions early in his career so that he could give tens of billions later in life.

Although it is unlikely that anyone reading The Tax-Smart Donor will generate the kinds of returns Buffett has over his lifetime, his deferred approach may be a viable strategy for some types of giving. It could, for example, be a sound plan for donating to one’s alma mater, which might be willing to forgo annual donations in the thousands for a seven-figure donation several decades in the future. It is hard, however, to imagine informing one’s local pastor that waiting could mean a six- or seven-figure donation to the church three decades from now.

In summary, DeMuth has produced a book that fills a void in the literature on financial planning by providing the reader with an understanding of the most effective ways to give to charity. It is an excellent reference for financial advisors, who may wish to provide some insight into questions from clients on charitable giving, as well as a valuable source for anyone who wishes to use the tax code to be a more effective donor.



Source link

Tags: bookdonorgivinglifetimeOptimizeplanReviewTaxsmart
ShareTweetShare
Previous Post

OnePay to add Bitcoin and Ether trading with Zerohash’s help

Next Post

Mysterious drones that officials can’t explain keep shutting down Europe’s airports: ‘it could be anybody’

Related Posts

edit post
Is Your Airbnb Losing Money? Here Are Five Easy Ways to Fix It

Is Your Airbnb Losing Money? Here Are Five Easy Ways to Fix It

by TheAdviserMagazine
October 2, 2025
0

In This Article This article is presented by PriceLabs. Most Airbnb hosts are losing money and don’t even realize it....

edit post
Financial Selection and Investor Herding: Lessons from Evolutionary Biology

Financial Selection and Investor Herding: Lessons from Evolutionary Biology

by TheAdviserMagazine
October 2, 2025
0

Biologists have long debated the mysterious role of mate selection in evolution. Investors can learn much from their findings. Mate...

edit post
The Five States With the Most Affordable Landlord Insurance Rates

The Five States With the Most Affordable Landlord Insurance Rates

by TheAdviserMagazine
October 1, 2025
0

In This Article This article is presented by Steadily. Did you know the cost to insure the exact same rental property...

edit post
NEOs ETFs: The new Income machine

NEOs ETFs: The new Income machine

by TheAdviserMagazine
October 1, 2025
0

Introduction: The Rise of Income-Focused Option ETFs In a yield-starved market, income-seeking investors have gravitated toward option-based ETFs—funds that combine...

edit post
Tokenized Money Market Funds Emerge, Piloted by Industry Big Whigs

Tokenized Money Market Funds Emerge, Piloted by Industry Big Whigs

by TheAdviserMagazine
October 1, 2025
0

Tokenized money market funds (MMFs) are emerging as a next‑generation “cash equivalent,” offering institutions faster settlement, collateral flexibility, and enhanced...

edit post
How to Invest in Real Estate on Lower Income (,000 or Less)

How to Invest in Real Estate on Lower Income ($50,000 or Less)

by TheAdviserMagazine
October 1, 2025
0

This is how to buy rental properties on a lower salary ($50,000 or less per year) in six steps.If you...

Next Post
edit post
Mysterious drones that officials can’t explain keep shutting down Europe’s airports: ‘it could be anybody’

Mysterious drones that officials can't explain keep shutting down Europe's airports: 'it could be anybody'

edit post
Trump gives Hamas Sunday 6 pm deadline to sign peace deal, warns ‘all hell’ will break out

Trump gives Hamas Sunday 6 pm deadline to sign peace deal, warns 'all hell' will break out

  • Trending
  • Comments
  • Latest
edit post
What Happens If a Spouse Dies Without a Will in North Carolina?

What Happens If a Spouse Dies Without a Will in North Carolina?

September 14, 2025
edit post
California May Reimplement Mask Mandates

California May Reimplement Mask Mandates

September 5, 2025
edit post
Does a Will Need to Be Notarized in North Carolina?

Does a Will Need to Be Notarized in North Carolina?

September 8, 2025
edit post
DACA recipients no longer eligible for Marketplace health insurance and subsidies

DACA recipients no longer eligible for Marketplace health insurance and subsidies

September 11, 2025
edit post
‘Quiet luxury’ is coming for the housing market, The Corcoran Group CEO says. It’s not just the Hamptons, Aspen, and Miami anymore

‘Quiet luxury’ is coming for the housing market, The Corcoran Group CEO says. It’s not just the Hamptons, Aspen, and Miami anymore

September 9, 2025
edit post
Tips to Apply for Mental Health SSDI Without Therapy

Tips to Apply for Mental Health SSDI Without Therapy

September 19, 2025
edit post
Book Review: The Tax-Smart Donor: Optimize Your Lifetime Giving Plan

Book Review: The Tax-Smart Donor: Optimize Your Lifetime Giving Plan

0
edit post
Mucinex Instasoothe Sore Throat Relief Lozenges, 40-Count only .36 shipped!

Mucinex Instasoothe Sore Throat Relief Lozenges, 40-Count only $2.36 shipped!

0
edit post
How to Turn Your Cybersecurity Into a Business Driver

How to Turn Your Cybersecurity Into a Business Driver

0
edit post
Bitcoin Rally Gains Steam as Key Resistance Zone Near 5,500 Comes Into View

Bitcoin Rally Gains Steam as Key Resistance Zone Near $125,500 Comes Into View

0
edit post
‘Taxes are part of everything’: Show Me Your Stack

‘Taxes are part of everything’: Show Me Your Stack

0
edit post
Amazon founder Jeff Bezos says AI bubble is real, but so is the technology

Amazon founder Jeff Bezos says AI bubble is real, but so is the technology

0
edit post
Mucinex Instasoothe Sore Throat Relief Lozenges, 40-Count only .36 shipped!

Mucinex Instasoothe Sore Throat Relief Lozenges, 40-Count only $2.36 shipped!

October 3, 2025
edit post
Amazon founder Jeff Bezos says AI bubble is real, but so is the technology

Amazon founder Jeff Bezos says AI bubble is real, but so is the technology

October 3, 2025
edit post
Jefferson’s War on the Barbary Pirates Is an Unjustified Password for Military Intervention

Jefferson’s War on the Barbary Pirates Is an Unjustified Password for Military Intervention

October 3, 2025
edit post
‘Taxes are part of everything’: Show Me Your Stack

‘Taxes are part of everything’: Show Me Your Stack

October 3, 2025
edit post
Trump gives Hamas Sunday 6 pm deadline to sign peace deal, warns ‘all hell’ will break out

Trump gives Hamas Sunday 6 pm deadline to sign peace deal, warns ‘all hell’ will break out

October 3, 2025
edit post
Mysterious drones that officials can’t explain keep shutting down Europe’s airports: ‘it could be anybody’

Mysterious drones that officials can’t explain keep shutting down Europe’s airports: ‘it could be anybody’

October 3, 2025
The Adviser Magazine

The first and only national digital and print magazine that connects individuals, families, and businesses to Fee-Only financial advisers, accountants, attorneys and college guidance counselors.

CATEGORIES

  • 401k Plans
  • Business
  • College
  • Cryptocurrency
  • Economy
  • Estate Plans
  • Financial Planning
  • Investing
  • IRS & Taxes
  • Legal
  • Market Analysis
  • Markets
  • Medicare
  • Money
  • Personal Finance
  • Social Security
  • Startups
  • Stock Market
  • Trading

LATEST UPDATES

  • Mucinex Instasoothe Sore Throat Relief Lozenges, 40-Count only $2.36 shipped!
  • Amazon founder Jeff Bezos says AI bubble is real, but so is the technology
  • Jefferson’s War on the Barbary Pirates Is an Unjustified Password for Military Intervention
  • Our Great Privacy Policy
  • Terms of Use, Legal Notices & Disclosures
  • Contact us
  • About Us

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.