Category: Charitable Giving & Philanthropy

Money Magnifies: What Will Your Wealth Say About You?

Posted on by elaina

As the CEO of BentOak Capital, I’ve had the privilege of working with exceptional individuals and families as they navigate the complexities of wealth. Over the years, one enduring truth has stood out: money doesn’t create happiness, but wealth does have a way of amplifying what’s already there. 

The Mirror of Wealth

The idea that “money can’t buy happiness” is one we hear often – and it’s true, in part. Money alone cannot fill the void of purpose or mend a broken relationship. But money does magnify the state of our lives. A family grounded in faith and strong values might find that financial success opens doors to purposeful generosity, deeper relationships, and meaningful opportunities. On the flip side, for those grappling with unresolved challenges or broken family dynamics, wealth can magnify those struggles – whether through strained relationships, a lack of direction, or unhealthy patterns like addiction. 

At BentOak Capital, we often meet families at pivotal moments – crossroads where wealth has exposed these deeper truths. It’s why we encourage examining not just financial goals but the motivations behind them. Scripture reminds us, “For where your treasure is, there your heart will be also” (Matthew 6:21). When we align our priorities with what truly matters most, wealth transforms from something that can feel overwhelming or burdensome into a powerful testament to a life of purpose, impact, and intentionality. 

Building a Legacy That Lasts

Here’s the reality: you can’t take it with you. No matter how much we accumulate, it stays behind when we’re gone. But what we leave – the relationships we’ve developed, the values we’ve passed on, and the lives we’ve impacted – can echo far beyond our lifetime. 

At BentOak Capital, we believe you should pass down your values alongside your valuables. Families who use their assets to grow closer, serve others, and live out their values create legacies that transcend material wealth. Whether it’s creating harmony in generational transitions, preparing children to steward resources wisely, or crafting philanthropic strategies that reflect eternal priorities, we guide families to focus on legacies with a lasting impact. 

Purpose in Action

When wealth is aligned with a clear sense of purpose, it can transform lives. We’ve seen families support causes they believe in, fund initiatives that create opportunities for others, and make a lasting difference in their communities. In these moments, wealth becomes more than an asset – it becomes a story, a legacy, a testament to what mattered most. 

But this doesn’t happen by accident. It requires clarity, alignment, and action. At BentOak Capital, we’re here to guide families through that process – ensuring that their resources are used intentionally and reflect the very best of who they are. It’s about turning success into significance. 

Final Thoughts

At BentOak Capital, we understand that money doesn’t buy happiness, but it will magnify what already exists. If your life reflects faith, commitment, purpose, and connection, it can amplify those blessings in extraordinary ways. If it reflects tension or a lack of direction, it often exposes those realities as well. 

So, ask yourself: What is your wealth magnifying? Are there areas that need realignment? Our hope is that by reflecting on this, we can approach wealth with clarity and intention, using it as a means to deepen relationships, serve others, and leave a legacy that truly matters. 

“Whoever can be trusted with very little can also be trusted with much…” (Luke 16:10).

Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by BentOak Capital (“BentOak”), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from BentOak.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  BentOak is neither a law firm, nor a certified public accounting firm, and no portion of the newsletter content should be construed as legal or accounting advice.  A copy of BentOak’s current written disclosure Brochure discussing our advisory services and fees is available upon request. Please Note: If you are a BentOak client, please remember to contact BentOak, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. BentOak shall continue to rely on the accuracy of information that you have provided or at www.bentoakcapital.com. Please Note: IF you are a BentOak client, Please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.  

Should I Use a Donor Advised Fund When Giving to Public Charities?

Posted on by RFTB Dev

If you want to give money to your favorite charity, how should you do that? The obvious option is to write them a check (though these days, it’s more likely to be done electronically). Quick, easy, no strings attached. They get the money now to help keep their charitable mission going.

Exploring Ways to Give to Charities

Another way—less common but potentially more valuable—is to give the charity something else of value. For example:

You can donate any of these assets to a charity, which may keep them or sell them for cash.

No matter how or what you give1, you get an income tax deduction in the year you make the gift. However, in some circumstances, you may not actually be able to use the full tax deduction when you file your taxes.

For instance, if you don’t itemize deductions on your tax return, you won’t see any tax benefit for your charitable gift. In 2025, the standard deduction is $15,000 for a single filer and $30,000 for married couples filing jointly. So your charitable gifts, combined with state and local taxes, home mortgage interest, and certain medical expenses, must exceed these thresholds to count.

Understanding Donor Advised Funds

This is where a donor advised fund (DAF) can come into play. A DAF allows you to make a contribution to the fund and receive an immediate tax deduction, even if the money isn’t distributed to a charity right away. Think of it as your charitable savings account. You can contribute cash, stocks, or other assets to the fund, and your donation is invested until you decide which charity or charities to support.

So, should I use a donor advised fund? It depends on your goals and tax situation, but DAFs offer distinct advantages.

The Flexibility and Benefits of Donor Advised Funds

One of the major advantages of using a DAF is the flexibility it offers. You can contribute to your DAF in a high-income year, take the tax deduction, and then distribute the funds to your chosen charities over time. This allows you to maximize your tax benefits while still supporting your favorite causes.

Are you looking to simplify your charitable giving while gaining the ability to strategically support the causes you care about most? A DAF might be the right solution.

Additionally, a DAF gives you time to research and select charities that align with your philanthropic goals, rather than feeling rushed to make decisions by a deadline (such as December 31).

At BentOak Capital, we specialize in aligning your charitable giving with your overall financial goals, ensuring you make the most of opportunities like donor advised funds. With our expertise, we can help you strategically maximize both your tax benefits and the long-term impact of your generosity.

Donor Advised Funds as an Estate Planning Tool

One of the major advantages of using a DAF is the flexibility it provides. You can contribute to your DAF in a high-income year, take the tax deduction, and then distribute the funds to your chosen charities over time. This allows you to maximize your tax benefits while still supporting your favorite causes. 

There’s no greater joy than knowing your generosity can make a lasting difference. With a donor advised fund, you can ensure your charitable giving aligns with your values and creates a meaningful impact for years to come.

Should You Use a Donor Advised Fund? 

If you’re considering making a substantial charitable contribution and want to take advantage of immediate tax benefits, you might ask yourself: Should I use a donor advised fund?

A donor advised fund could be an excellent option. It provides flexibility, an opportunity to strategize your giving, and the ability to create a lasting impact. Just be sure to weigh the pros and cons carefully to ensure it’s the right fit for your charitable aspirations.

To learn how BentOak Capital can help you make the most of your charitable giving, contact us today.

 

 

1 There are of course rules for gifts of anything that’s not cash. For instance, some types of assets (the car, the house, the patents) require a qualified appraisal. Also, you have to fill out Form 8283.

 

Please remember to contact BentOak Capital (“BentOak”), in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to impose, add, to modify any reasonable restrictions to our investment advisory services, or if you wish to direct that BentOak to effect any specific transactions for your account. A copy of our current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.bentoakcapital.com.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Securities offered through LPL Financial, Member: FINRA/SIPC. Investment advice offered through BentOak Capital, a registered investment advisor and separate entity from LPL Financial.

Gift to Charity, Stiff the IRS (Twice!)

Posted on by RFTB Dev

Gifting appreciated securities is one of the most effective and tax-efficient forms of charitable giving. This blog post will discuss the two primary benefits you enjoy by utilizing this strategy and show you the steps you’ll need to take. In addition, we’ll review a few other important caveats you’ll need to know. 

What is Appreciation? 

Appreciation in a security’s value—whether it’s a stock, bond, or mutual fund—simply means an increase in price since you purchased it. When you sell a stock¹ that has gained in value, you’re required to pay capital gains tax on the increase (calculated as fair market value minus purchase price). The capital gains tax rate depends on both how long you’ve held the stock and your overall income level, with rates ranging from 0% to 23.8%².

Why Gift to Charity? 

Benefit #1: When you make a gift of appreciated stock to charity, you avoid paying capital gains tax on the appreciation. The charity, as a nonprofit, also doesn’t pay any capital gains tax when it sells the stock, so 100% of your gift goes directly to support the cause, with none going to taxes. 

Benefit #2: You’re eligible for an income tax deduction based on the full fair market value of the stock at the time of the gift. For instance, if the stock is worth $50,000, you receive a $50,000 tax deduction. However, the IRS limits the amount of charitable deductions you can claim in a single tax year.

Tax Deduction Limitations 

Consider a scenario where your income in 2024 is $100,000, and you gift $100,000 in stock to your alma mater. Based on IRS rules, you can only deduct up to 30% of your Adjusted Gross Income (that’s line 11 on your individual income tax return). Income of $100,000 x 30% = $30,000. You would show this $30,000 on your list of itemized deductions, reducing your taxable income to $70,000. But you gifted stock worth $50,000! The remaining $20,000 deduction carries over to future tax years, allowing you to deduct it over the next five years if necessary. It’s essential that you or your CPA track any remaining carryover for future use—neither the IRS nor BentOak Capital does this. 

This strategy also provides a valuable opportunity to rebalance your portfolio or reduce reliance on a single large holding with minimal tax impact, all while supporting a cause you care about.

Gifts of appreciated stock must come from a taxable investment account, such as a brokerage or non-qualified account. IRA-held stocks aren’t eligible for this strategy; gifts from an IRA follow different rules.

Gift to Charity: How to Begin Gifting Appreciated Securities 

First, make sure your favorite charitable organization, church, hospital, or university is eligible to receive tax-deductible charitable contributions³. If you or a family member has previously set up a Donor Advised Fund (DAF), that is also a qualified charity and can be an excellent place to gift your appreciated stock.

Second, in order to accept a gift of stock, the charity will need a brokerage account and should be able to provide its account number and other necessary information. Provide that information to a BentOak Capital advisor, and we can handle the transfer process for you.

Third, make sure to communicate with the charity to confirm receipt of the stock. They should provide you a written acknowledgement of receipt. Keep that acknowledgement for when you file your taxes.

Lastly, you will need to fill out an IRS form 8283 which details the gift; this form is filed with your taxes.

If you intend to wait until the end of the year to make a charitable gift like this, it’s best not to delay until December 31, as unintended backups and delays can happen.

Summary 

For those already charitably inclined, gifting appreciated stock is a tax-efficient way to support causes you care about while enjoying significant tax benefits. This strategy can be especially beneficial in high-income years, though it may be less impactful in years with lower income. If this interests you, reach out to a BentOak Capital advisor to discuss your situation. We also encourage collaborating with your CPA to ensure full alignment on your tax planning.

 

 

1 – For the remainder of this blog, I’ll use the word “stock” instead of security simply because most charitable gifts of appreciated securities are in fact gifts of stock, plus more people know what a “stock” is as compared to a “security”, plus I’m not being paid by the number of letters I type. Just keep in mind that bonds, shares of mutual funds, exchanged traded funds, and more count as securities and can be gifted in the same manner.

2 – Technically the capital gains tax rates are 0%, 15%, and 20% but the 2010 Affordable Care Act added a 3.8% “surcharge” (also known as a tax) on realized capital gains if the seller’s income is over $200,000 single or $250,000 married. This effectively creates capital gains tax tiers of 0%, 15%, 18.8%, 20%, and 23.8%. Also technically, the surcharge is on “net investment income” and encompasses more than simply realized capital gains but I’m writing an explanatory blog post not a book.

3 – What you want is an organization recognized by the IRS as tax-exempt under section 501(c)3 of the Internal Revenue Code. If in doubt, consult one of the online databases like the IRS search tool, Guidestar or Charity Navigator, or ask the charitable organization for a copy of their IRS determination letter. Donations to certain organizations like political parties, campaigns, and action committees do not qualify for the same tax benefits described here.

 

Please remember to contact BentOak Capital (“BentOak”), in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to impose, add, to modify any reasonable restrictions to our investment advisory services, or if you wish to direct that BentOak to effect any specific transactions for your account. A copy of our current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.bentoakcapital.com.    

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.   

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.   

Securities offered through LPL Financial, Member: FINRA/SIPC. Investment advice offered through BentOak Capital, a registered investment advisor and separate entity from LPL Financial. 

Leveraging Qualified Charitable Distributions

Posted on by RFTB Dev

Navigating the tax code to identify tax planning opportunities is tricky for the average joe. Even Albert Einstein said, “The hardest thing to understand in the world is the income tax.” With tax season wrapping up you might be reviewing your return wondering if there are any opportunities to generate more tax savings going forward. For the charitably inclined, you might be interested to learn more about utilizing a qualified charitable distribution to reduce your taxable income and meet your philanthropic gifting goals.

What is a Required Minimum Distribution?

First, let’s talk about what a required minimum distribution is. Once you hit age 72, the IRS requires you to start taking funds from your IRA called a Required Minimum Distribution (RMD). You must pull this RMD from your IRA on an annual basis starting at age 72 regardless of if you need the funds to supplement cash flow, and the distributed dollars are taxable to you as ordinary income. The additional taxable income has the potential to push you into the next marginal bracket, which can be frustrating if you do not need those funds for day-to-day expenses. For individuals that are charitably inclined, one strategy to consider is utilizing a qualified charitable distribution.

What is a Qualified Charitable Distribution and How Does it Work?

A qualified charitable distribution (QCD) is when you make a distribution directly from your IRA to a charitable organization. Distributions made in this fashion are not considered taxable income, help you satisfy the required minimum distribution, and provide funds to charity. Please note this must be a direct distribution from your IRA to the qualified charity – you cannot put the distribution into your bank account and then write a check to the charity.

To qualify the charity must be an eligible church or 501(c)3 organization. It is important to note that donor advised funds, private foundations, or charitable gift annuities do not qualify as eligible recipients. If you regularly give to a charity and want to check their eligibility, you can utilize the IRS tax-exempt search link below:

https://apps.irs.gov/app/eos

Earlier we mentioned that it is important to know what a required minimum distribution is to understand one of the benefits with this strategy. As a reminder, once you turn 72 years old the IRS will require you to satisfy a required distribution amount. Commonly this is sent as a check to the account holder, to a bank account, or to a taxable investment account, which fulfills the minimum distribution requirement but also triggers ordinary income tax on the distributed funds. Instead, you can send either a portion or the full RMD directly to a qualified charity(s) and the proceeds are not taxable.

In the past, if you were looking for some tax incentives with charitable donations it required you to itemize when tax filing so you could get a charitable deduction. With the current high standard deduction limits of $12,950 (single) and $25,900 (married filing joint), you must give more than those limits to charity for itemizing to be beneficial. Instead, with a QCD you do not get a charitable deduction, but the entire distribution sent to the charity is not included in your taxable income. So, this allows you to still meet your charitable giving goals while not having to pay ordinary income tax on the minimum distribution the IRS requires you to draw.

Here are nine quick reminders about QCDs, how they work, and how they might be beneficial to you as we finish out the year. 

  1. The annual QCD cap is $100,000 per person ($200,000 MFJ).
  2. You become eligible to make a QCD at age 70.5, but it will not start counting toward your RMD limit until age 72.
  3. Beneficiary IRA owners can also do a QCD but must be at least 70.5 years old to qualify.
  4. SEP IRA and SIMPLE IRA accounts are eligible to make QCDs but only if there were no employer contributions made for the plan year in which the QCD is made.
  5. Employer qualified retirement plans (401k, 403b, profit sharing plan, etc.) are not eligible to make a QCD under any circumstance.
  6. A QCD is not reported as such on the 1099-R. There is no code or box on that form that says “QCD”. Get a gift receipt from the charity or confirmation from your advisor. On the 1040, the total amount of IRA distributions you made this year (including your QCD) goes on line 4a. The taxable portion of the IRA distribution (anything other than the QCD) goes on line 4b and you or your tax preparer should write “QCD” next to line 4b so your CPA will know to file it correctly.
  7. Non-deductible IRA contributions and after-tax rollover funds are not eligible to be a QCD.  It must come from pre-tax dollars (IRAs are typically funded with pre-tax dollars, but not always – consult your advisor for details).
  8. The first dollar you take out of an IRA in any year is considered part of your taxable RMD unless it is a QCD. If you take a withdrawal from your IRA in February, place the funds into your bank account, and then in November complete a qualified charitable distribution, then the February withdrawal is considered taxable income.  If the February withdrawal was not enough to satisfy your required minimum distribution for the year but the QCD was enough to cover the difference, you do not have to make any further IRA distributions this year.  But you still must pay taxes on the amount withdrawn in February.
  9. Qualified charitable distributions can be valuable to high-income retirees, potentially keeping them away from limits to itemized deductions, the 3.8% Medicare ACA surtax, or increased Medicare premiums. But QCDs can also be valuable to retirees who are not in the top tax bracket since you cannot get a tax deduction for specific charitable donations if you don’t itemize your deductions.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.