Supercharge Roth Conversions thru DAFs

Summary

In this episode, Craig Wear discusses how to supercharge your Roth conversion strategy by using donations. He introduces the concept of Qualified Charitable Donations (QCDs) and explains how they can be used to offset taxable minimum distributions. Craig then dives into the benefits and workings of Donor Advised Funds (DAFs), which act as charitable giving accounts. He highlights the tax advantages of DAFs, including immediate tax deductions and the elimination of capital gains tax. Craig concludes with an example demonstrating the combination of Roth conversion and DAFs, and offers recommendations for a coordinated approach.

Takeaways

• Qualified Charitable Donations (QCDs) can be used to offset taxable minimum distributions from IRAs.
• Donor Advised Funds (DAFs) are flexible charitable giving accounts that offer immediate tax deductions and tax-free growth.
• Combining Roth conversions with DAFs can result in significant tax savings.
• Coordinating with a Roth specialist, investment advisor, and CPA is recommended for an effective strategy.

Chapters

00:00
Introduction and Setting the Stage

01:25
Using Qualified Charitable Donations (QCDs)

04:37
Donor Advised Funds (DAFs)

09:08
Tax Benefits of Donor Advised Funds

12:28
Example: Combining Roth Conversion and Donor Advised Funds

15:15
Considerations and Recommendations