A Brief and Humorous Addition for this Week

A Brief and Humorous Addition for this Week

Group News posted in on 27 November 2018| comments
audience: National Publication | last updated: 28 November 2018


Thinking DAF at year end? Think again.


The end of the year is upon you and you are meeting with your CPA, who is peering at you above a stack of freshly delivered DAF brochures and application forms from an investment company. Just like last year and the year before and, well you get it.

You need last minute income tax offset strategies. “What kinds of deductions can I create right now?” Your CPA leans forward and whispers, “You can get some kind of elective surgery done, or (and he points to the stack of brochures) you can create a DAF.”

You’re thinking, here we go again, same time of year, same advisor, same solutions. And that’s when you swipe the DAF brochures onto the floor and say, “Pimp my deduction!”

The CPA looks at his desk and sees a long forgotten Pooled Income Fund illustration from Randy Fox. He looks at you, smiles broadly and says, “You can create a PIF. Instead of reducing your taxable income by 50%, by following the usual recommendation to donate $1 million in a combination of cash and appreciated stock to a DAF, consider donating $1.25 million to a PIF. Same deduction, but the PIF invests all that money and you get all the net income for life.

“Only $250K more for the same deduction, plus I can keep the net income for life that the whole $1.25 million can earn for me?”

CPA nods.

“Pimp my deduction!”

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