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Giving Publicly Traded Stock To Charity1


One of the best things about having highly appreciated publicly traded stock is that it is the most attractive way to make charitable gifts. The Gotham Gal and I do this all of the time and I encourage others (founders, early employees, investors, angels, etc) to do it. Here’s how it works: Let’s say you have shares of Facebook that you got when you joined back in 2006. Let’s say that your exercise price was $3/share and that is your cost basis. Let’s say you want to make a $100,000 gift to a great cause that you are deeply involved with. Instead of taking out your checkbook (who does that anymore?) and writing a $100,000 check, consider gifting some Facebook shares. At $175/share, a $100,000 gift would be 571 shares. So you ask the charity if you can gift shares. Almost every time I do that, the answer is yes. They give you a brokerage account that you can “DTC” the shares to. And you instruct your brokerage firm to move the 571 shares to the charity’s brokerage account and you have made a $100,000 gift. But, because you no longer have to pay the capital gains taxes on those shares when you sell them, and neither does the charity, you have a much more tax efficient gift. I figure that a stock gift costs about 10-20% of the dollar value of the gift if you live in a high tax location like NYC. Here is how I get to that math, using NYC tax rates: $100,000 gift less $50,000 for the tax benefit of the charitable gift deduction less $38,000 for the capital gains taxes that do not have to be paid on the stock equals $12,000 So if you have highly appreciated publicly traded stock and are interested in giving to good causes, consider gifting stock instead of cash. It is a great way to be generous. https://avc.com/2018/05/giving-publicly-traded-stock-to-charity/

Giving Publicly Traded Stock To Charity


One of the best things about having highly appreciated publicly traded stock is that it is the most attractive way to make charitable gifts. The Gotham Gal and I do this all of the time and I encourage others (founders, early employees, investors, angels, etc) to do it. Here’s how it works: Let’s say you have shares of Facebook that you got when you joined back in 2006. Let’s say that your exercise price was $3/share and that is your cost basis. Let’s say you want to make a $100,000 gift to a great cause that you are deeply involved with. Instead of taking out your checkbook (who does that anymore?) and writing a $100,000 check, consider gifting some Facebook shares. At $175/share, a $100,000 gift would be 571 shares. So you ask the charity if you can gift shares. Almost every time I do that, the answer is yes. They give you a brokerage account that you can “DTC” the shares to. And you instruct your brokerage firm to move the 571 shares to the charity’s brokerage account and you have made a $100,000 gift. But, because you no longer have to pay the capital gains taxes on those shares when you sell them, and neither does the charity, you have a much more tax efficient gift. I figure that a stock gift costs about 10-20% of the dollar value of the gift if you live in a high tax location like NYC. Here is how I get to that math, using NYC tax rates: $100,000 gift less $50,000 for the tax benefit of the charitable gift deduction less $38,000 for the capital gains taxes that do not have to be paid on the stock equals $12,000 So if you have highly appreciated publicly traded stock and are interested in giving to good causes, consider gifting stock instead of cash. It is a great way to be generous. https://avc.com/2018/05/giving-publicly-traded-stock-to-charity/

Giving Publicly Traded Stock To Charity1


One of the best things about having highly appreciated publicly traded stock is that it is the most attractive way to make charitable gifts. The Gotham Gal and I do this all of the time and I encourage others (founders, early employees, investors, angels, etc) to do it. Here’s how it works: Let’s say you have shares of Facebook that you got when you joined back in 2006. Let’s say that your exercise price was $3/share and that is your cost basis. Let’s say you want to make a $100,000 gift to a great cause that you are deeply involved with. Instead of taking out your checkbook (who does that anymore?) and writing a $100,000 check, consider gifting some Facebook shares. At $175/share, a $100,000 gift would be 571 shares. So you ask the charity if you can gift shares. Almost every time I do that, the answer is yes. They give you a brokerage account that you can “DTC” the shares to. And you instruct your brokerage firm to move the 571 shares to the charity’s brokerage account and you have made a $100,000 gift. But, because you no longer have to pay the capital gains taxes on those shares when you sell them, and neither does the charity, you have a much more tax efficient gift. I figure that a stock gift costs about 10-20% of the dollar value of the gift if you live in a high tax location like NYC. Here is how I get to that math, using NYC tax rates: $100,000 gift less $50,000 for the tax benefit of the charitable gift deduction less $38,000 for the capital gains taxes that do not have to be paid on the stock equals $12,000 So if you have highly appreciated publicly traded stock and are interested in giving to good causes, consider gifting stock instead of cash. It is a great way to be generous. https://avc.com/2018/05/giving-publicly-traded-stock-to-charity/

Giving Publicly Traded Stock To Charity1


One of the best things about having highly appreciated publicly traded stock is that it is the most attractive way to make charitable gifts. The Gotham Gal and I do this all of the time and I encourage others (founders, early employees, investors, angels, etc) to do it. Here’s how it works: Let’s say you have shares of Facebook that you got when you joined back in 2006. Let’s say that your exercise price was $3/share and that is your cost basis. Let’s say you want to make a $100,000 gift to a great cause that you are deeply involved with. Instead of taking out your checkbook (who does that anymore?) and writing a $100,000 check, consider gifting some Facebook shares. At $175/share, a $100,000 gift would be 571 shares. So you ask the charity if you can gift shares. Almost every time I do that, the answer is yes. They give you a brokerage account that you can “DTC” the shares to. And you instruct your brokerage firm to move the 571 shares to the charity’s brokerage account and you have made a $100,000 gift. But, because you no longer have to pay the capital gains taxes on those shares when you sell them, and neither does the charity, you have a much more tax efficient gift. I figure that a stock gift costs about 10-20% of the dollar value of the gift if you live in a high tax location like NYC. Here is how I get to that math, using NYC tax rates: $100,000 gift less $50,000 for the tax benefit of the charitable gift deduction less $38,000 for the capital gains taxes that do not have to be paid on the stock equals $12,000 So if you have highly appreciated publicly traded stock and are interested in giving to good causes, consider gifting stock instead of cash. It is a great way to be generous. https://avc.com/2018/05/giving-publicly-traded-stock-to-charity/

Is Buying Crypto Assets “Investing”1


There are few investors I have more respect for than Warren Buffett and Charlie Munger. So much of what I believe as an investor has come from watching them conduct themselves over the last thirty-five years (that’s as long as I have been paying attention to investing as a discipline). I believe in fundamental value, I believe in buying when others are selling, I believe in holding positions you find attractive over very long periods of time, and I believe in a lot more that they have espoused and done. So when I read the two of them disparaging the purchase of crypto assets, it bothers me. Obviously I don’t agree with them, but I am trying to see what they are seeing and disliking. This interview that Buffett did with Yahoo! Finance is instructive. Buffet says: “If you buy something like a farm, an apartment house, or an interest in a business… You can do that on a private basis… And it’s a perfectly satisfactory investment. You look at the investment itself to deliver the return to you. Now, if you buy something like bitcoin or some cryptocurrency, you don’t really have anything that has produced anything. You’re just hoping the next guy pays more.” When you buy cryptocurrency, Buffett continues, “You aren’t investing when you do that. You’re speculating. There’s nothing wrong with it. If you wanna gamble somebody else will come along and pay more money tomorrow, that’s one kind of game. That is not investing.” It is clear from those words that Buffett sees crypto assets like a baseball trading card or some other form of collectible. And if that were true of Bitcoin, Ethereum, EOS, Zcash, or many other popular crypto assets, I would agree with him. But what these crypto tokens are is entirely something else. They are the fuel that powers a new form of technology infrastructure that is being built on top of the foundational internet protocols. Ethereum and EOS are smart contract platforms that allow developers to create decentralized applications (Dapps in the vernacular of crypto). Bitcoin and Zcash are stores of value that allow users to participate in this decentralized application space without the need for fiat currencies. This is the key phrase of Buffet’s that I feel is incorrect “if you buy something like bitcoin or some cryptocurrency, you don’t really have anything that has produced anything.” Crypto-assets produce decentralized infrastructure. Bitcoin has produced a transaction processing infrastructure that looks a lot like Amazon Web Services (something I am sure Buffett would agree is extremely valuable). Ethereum has produced a similar transaction processing infrastructure which is also able to run smart contracts. I believe smart contracts are the most important innovation we have yet seen in crypto. What Buffett and Munger may also be saying is that they don’t know how to value this “fuel” that powers the creation of this decentralized infrastructure. If they are saying that, then I agree with them. I don’t know how to value this fuel either. We cannot use discounted cash flow because this decentralized infrastructure may not produce a lot of cash flow. It is designed to create hypercompetitive networks that are self-commoditizing. It is much more likely that these crypto assets will trade and be valued like currencies that underpin economies. There has been a lot of research and writing on that. I have recommended Chris Burniske’s Cryptoassets book here before and I will do so again. Chris outlines much of this thinking in that book. I doubt Warren and Charlie will read this post. But if they do, the one thing I would hope they take from it is that instead of disparaging crypto assets with words like rat poison and dementia, they take a little bit of time to understand that what we are seeing here is the creation of a new internet, built upon protocols that allow for decentralized networks to form and tokens that allow people and companies to be compensated for that formation. And that cryptoassets are the fuel that power and compensate for that formation. And that purchasing these cryptoassets is very much a form of investing. And that this investing is the first time that anyone in the world, independent of wealth and domicile, can participate in venture capital style investing in the next big wave of technology. https://avc.com/2018/05/is-buying-crypto-assets-investing/