Welcome to the EPAC Corner! We are pleased to bring you this content from the Estate Planning Advisory Committee (EPAC) of the DeKalb County Community Foundation. If you have any questions about the information below or the EPAC group, please contact Community Foundation Executive Director Dan Templin at 815-748-5383 or dan@dekalbccf.org. 

Bundling and Bunching Benefits

During our working lives, our incomes may ebb and flow from year to year. This makes “bunching” or “bundling” through a Donor Advised Fund at the DeKalb County Community Foundation very useful. Because contributions to the Donor Advised Fund are eligible for an immediate tax deduction but are not required to be granted to charities immediately, you can “front load” donations into the Fund. Doing this allows you to take advantage of itemizing deductions during a high-income year and contributing less to the Fund in lower-income years. With a Donor Advised Fund, you can make an annual grant recommendation from the Fund to your favorite charities, aligning your generosity with your intentions of support.

This giving approach has become particularly beneficial following the Tax Cuts and Jobs Act of 2017. Due to the increased standard deduction and the cap on deductibility of state and local taxes, many donors no longer receive tax deductions for their regular giving. By bunching gifts to a Donor Advised Fund in a single year, donors can benefit from the charitable deduction but spread the charitable donation across multiple years.

Does bunching work with long-term appreciated assets?

Yes! It is always a great plan to donate appreciated long-term assets to Donor Advised Funds. Donating an appreciated asset to your Fund is tax efficient because the donation is typically deductible at the asset’s fair market value. In turn, the Community Foundation pays no capital gains tax on the asset’s sale, generating more dollars to support charitable causes than the donor would have had if the donor had sold the asset and given the proceeds directly to a charity.

Does it work to give farmland?

Yes! Real estate is an excellent long-term asset to donate to a Donor Advised Fund at the Community Foundation, especially now. Despite higher interest rates and inflation, reported DeKalb County farmland values continue to increase. As with gifts of other long-term appreciated assets, a donation of farmland to a Fund at the Community Foundation avoids capital gains taxes and generates more money for charitable causes than selling the property first and donating the proceeds. This is also a good option for a grain donation to the Community Foundation. Learn more about giving a gift of grain >

– Matthew L. Brown, local attorney and member of the DeKalb County Estate Planning Advisory Committee

Established in 2020, the DeKalb County Estate Planning Advisory Committee (EPAC) is comprised of local professionals providing estate planning services, including Attorneys, Trust Officers, CPAs, Wealth Advisors, and Insurance Agents. The purpose of the EPAC is to raise awareness and understanding of the Community Foundation as a resource for professional advisors and their clients, assist with efforts to deliver effective estate planning education to the general public, and to notify estate planning professionals on topics relevant to the intersection of estate planning and philanthropy.

Matthew L. Brown