Prosperl CPA

09/29/2026

Something I always say: so much of tax planning is around timing.

Giving on a steady rhythm, the same amount to the same church every year, is generous. It is not always efficient.

If you have a year where your income is significantly higher than normal, a bonus, a big contract, a sale, and it puts you in a higher bracket, a deduction is worth more that year than in an ordinary one. So that can be the year to compress your charitable deductions into.

One clean way to do it is a donor-advised fund. You put several years of intended giving into the fund in the big year and deduct it that year. Then you recommend grants to your church on the same schedule it has always been paid. The church still receives it over time. Your giving did not drop, you gave it earlier.

What comes with it.

Immediate does not mean unlimited. Cash into a donor-advised fund deducts up to 60% of AGI, appreciated assets held more than a year up to 30%, and the excess carries forward five years.

New for 2026: at the top bracket, a dollar of itemized deduction is worth 35 cents, not 37.

The gift to the fund is irrevocable. Once it is in, it is legally the charity's money, and you advise where it goes.

And because this is usually church giving. If it is a signed, binding pledge, talk to your CPA before the fund pays it, those rules are still not settled.

Full conversation with Phoenix Hafen of UI Charitable: youtu.be/W4R0JHJCTiw

Tax year 2026 figures.

ProsperlCPA.com/Apply

Educational only, not advice.

09/29/2026

Here is the mechanism, in the plainest terms I can put it.

You bought a position at 100. It is worth 200 today. You intend to give 200 away.

If you sell first, you recognize the gain, you pay the tax, and you donate what survived. Your deduction is smaller and so is the gift.

If you move the shares into a donor-advised fund instead, you deduct the full market value and the fund sells it with no capital gain recognized. The full 200 is available to grant out.

Same asset, same generosity, two different results. That is the entire reason this vehicle exists.

Two things the conversation does not say and you should know. The position has to have been held more than one year, otherwise the deduction is limited to what you paid. And gifts of appreciated assets are deductible up to 30% of adjusted gross income in a year, with the excess carrying forward up to five years.

ProsperlCPA.com/Apply

Educational only, not advice.

09/27/2026

A short one, and it is the whole philosophy.

My favorite way of reducing taxes is by doing things you already want to do, and then finding the tax incentives and tax savings that are aligned with it.

The order is the entire point. If you go hunting for a deduction first, you end up spending money on things you never wanted in order to save a fraction of what you spent. If you start with what you were going to do anyway, the savings are a byproduct and the decision is still a good one without them.

That is the difference between a strategy and a scheme.

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Educational only, not advice.

09/27/2026

We made a 32 minute episode about donor-advised funds and there is one sentence neither of us said on camera. So I am going to say it here.

The gift is irrevocable.

Once the assets go into a donor-advised fund, they legally belong to the sponsoring charity. You advise where the grants go, you do not direct them. You cannot take it back. You cannot use it for yourself or your family.

That is not a catch buried in a footnote. It is the reason the deduction works at all. The sponsor having exclusive legal control over the assets is exactly what makes the contribution deductible, and you are required to hold a written acknowledgment from them saying so, or there is no deduction.

So when someone tells you that you get the write-off now and decide later, both halves are true, and the price of the first half is that the money stops being yours.

If you are already giving every year and you are going to keep giving every year, that price is not a problem, it is a description of what you were doing anyway.

If you are looking at this as a parking spot, it is the wrong tool and you should hear that from a CPA before you sign, not after.

Full conversation with Phoenix Hafen of UI Charitable: https://youtu.be/W4R0JHJCTiw

Educational only, not advice.

Donor Advised funds can save you a fortune if you're a high income ...

09/26/2026

If you own rentals, this is the number people get wrong most often.

When you sell, the depreciation you took comes back. But not all at one rate. Unrecaptured section 1250 gain on the building itself is capped at 25%. The components a cost segregation study carved out, the 5 and 7-year property, come back as ordinary income at up to 37%. One sale, two different rates, and the difference is real money.

Now the piece we did not get to in the episode, and it is the one that matters if you are thinking about giving real estate away.

Donating the property does not make the recapture disappear. Section 170(e)(1)(A) reduces your charitable deduction by the ordinary income you would have recognized had you sold it. So donating appreciated stock gets you a full fair market value deduction. Donating a cost-segregated rental does not. The recapture comes out of your write-off instead of out of your pocket.

That is not a reason to skip the strategy. It is a reason to run the numbers before you move the asset.

ProsperlCPA.com/Apply

Educational only, not advice.

09/26/2026

A donor told Phoenix Hafen he wanted to buy a rundown school building in his community and turn it into a community center. No flip, no resale, he just wanted to fix something in the place he lives.

He could have done it with his own money. That would have meant selling about a million dollars of public securities first, paying the tax on the gain, and buying the building with whatever was left.

Instead he bought it out of his donor-advised fund.

The securities were sold inside the fund, so there was no capital gains liability on the sale. The fund purchased the building. It is being renovated right now, and eventually it goes to a group that will actually run it.

That whole thing is the idea I keep coming back to. My favorite way to cut a tax bill is to take something you already wanted to do, then find the incentive that is already sitting there, aligned with it.

He wanted the building either way. The structure just meant the tax bill did not get to take a piece on the way in.

The full conversation on donor-advised funds is here, the school building story starts at 8:23: https://youtu.be/W4R0JHJCTiw

Educational only, not advice.

Donor Advised funds can save you a fortune if you're a high income ...

09/24/2026

You already give. To your church, to the causes you believe in, to the people in your city doing the work.

And if you are like most of the high income earners I sit down with, you give by writing a check.

That check is usually the most expensive way to be generous.

Cash is usually the least tax efficient asset on your balance sheet. The stock you bought years ago and never trimmed, the position that has run up, the business you are about to sell, those are the assets the code actually rewards you for giving away. Most people never hear it until the sale has closed and the window is gone.

I sat down with Phoenix Hafen at UI Charitable and we went through it from the ground up. What a donor-advised fund actually is, how a gift really gets done, and the timing decisions that decide whether any of it works.

One thing we did not get to on camera, and it is the part people get wrong. Immediate does not mean unlimited. Cash into a fund is deductible up to 60% of your AGI. Appreciated assets held more than a year come off at fair market value, up to 30%. Anything over that carries forward five years.

It does not change the strategy. It changes the sizing, and sizing is where this goes sideways.

Watch: https://youtu.be/W4R0JHJCTiw

Tax year 2026 figures. Educational only, not advice.

Donor Advised funds can save you a fortune if you're a high income ...

09/23/2026

When people find out Phoenix Hafen does charitable planning for a living, the question he gets most is, if I already have the cash and I already know the charity, what do I need you for?

His answer on our episode: "You should never just give cash to charity."

Not a shot at generosity. A point about assets. Cash is the least tax-efficient thing you can hand over. Look at your balance sheet instead, find the most appreciated position, and give that. You deduct the value and you never recognize the gain.

My qualifier, because he is making a planning point and I have to make the tax one: cash deducts up to 60% of adjusted gross income, appreciated property up to 30%. If you hold no appreciated assets, or the gift is large relative to your income, cash may still be the better move. That is a numbers conversation, not a rule of thumb.

ProsperlCPA.com/Apply

Educational only, not advice.

09/23/2026

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09/23/2026

Many business owners come to us in the year they sell. They fully intend to give some of it away. Almost all of them plan to do it after the check clears.

That sequence costs them.

Donate a portion of the business into a donor-advised fund before the sale, and the capital gains on that portion never hit you. Sell first, and you pay the tax, then donate what survived it. Same generosity, very different bill.

Here is the catch, and the episode does not name it: the gift has to happen before the deal is locked in. Once there is a binding agreement to sell, the IRS treats the gain as yours regardless of who holds the shares.

The full conversation with Phoenix Hafen of UI Charitable is up now: youtu.be/W4R0JHJCTiw.

ProsperlCPA.com/Apply

Educational only, not advice.