If you give to charity every year, how you give can matter as much as how much. Here's the year-end giving rule to run with your CPA.
You write the checks every December. The school. The church. The hospital that took care of your dad. Maybe it's $10,000 a year. Maybe it's a lot more.
And every year, the money comes from the same place: your checking account.
Meanwhile, somewhere in your brokerage account sits a position you bought years ago. It's worth far more than you paid. You've been meaning to trim it. You haven't, because selling means a tax bill.
Those two facts belong together. Most people never connect them.
Two terms first: "itemize" and "bunch"
Two words come up a lot below, so here's what they mean in plain English.
Itemizing. Every year, your tax return lets you subtract one of two amounts from your income. You can take the standard deduction, which is a flat amount everyone gets with no receipts needed. Or you can itemize, which means adding up specific deductions like mortgage interest, state and local taxes (up to a limit), and charitable gifts, and taking that total instead. You take whichever one is bigger. Here's the catch: if you take the standard deduction, your charitable gifts generally don't lower your taxes much, if at all. They only fully count when your itemized total beats the standard deduction.
Bunching. Bunching means putting two, three, or more years of giving into a single tax year instead of spreading it out evenly. In the "big" year, your itemized total clears the standard deduction by a wide margin, so your gifts count. In the off years, you give little or nothing yourself and take the standard deduction. You give the same total over time, but more of it actually reduces your taxes.
A simple picture: say your other itemized deductions leave you just short of the standard deduction. Give $20,000 every year, and part of every gift may do nothing for you on your taxes. Give $60,000 once every three years, and most of that gift counts in the year you make it.
Your CPA can tell you in a few minutes which side of the line you're on.
The mechanism: you can give the gain without paying tax on it
When you sell appreciated shares, you owe tax on the gain. When you give appreciated shares you've held for more than a year directly to a qualified charity (or to a donor-advised fund), the rules are generally different:
You generally don't pay capital gains tax on the shares.
If you itemize, you can generally deduct the fair market value, subject to IRS limits.
The charity gets the full value, because it can sell the shares without paying tax.
Compare two ways to give $50,000.
A hypothetical. Shares worth $50,000, bought for $10,000. That's a $40,000 gain. Assume a combined federal rate of 23.8% on long-term gains (your rate may differ, and state tax is extra).
Sell, then give cashGive the sharesGain taxed$40,000$0Estimated federal taxabout $9,520$0Reaches charityabout $40,480 (sell, pay the tax, give the rest)$50,000
Same charity. Same intent. Roughly $9,500 of difference, and it comes from which asset you used, not from giving any more.
The tax bill on a big gain doesn't go away when you give cash. You just never got to use that gain for good.
Why 2026 makes the "how" matter more
Starting in 2026, the rules for itemized charitable deductions changed in two ways worth knowing:
A floor. If you itemize, only giving above 0.5% of your adjusted gross income is deductible. The first slice each year produces no deduction.
A cap on the benefit for top-bracket taxpayers. For people in the top federal bracket, the value of itemized deductions is limited to about 35 cents on the dollar instead of 37.
The floor is the one that changes behavior. Because it applies once per year, giving the same amount every year runs into it every year.
A hypothetical. Adjusted gross income of $1,000,000, so the floor is $5,000.
Give $20,000 a year for three years: about $5,000 per year is non-deductible, or roughly $15,000 over three years.
Give $60,000 once, in a single year: about $5,000 is non-deductible, once.
Same total giving. Roughly $10,000 more deductible, just from timing. (This is simplified. It ignores the cap and your other deductions, which is why your CPA runs the real numbers.)
That's bunching at work again: put several years of giving into one tax year, then take the standard deduction in the off years.
The tool that makes bunching work: a donor-advised fund
Bunching has one problem. Your charities still want gifts every year, not one big check every third year.
A donor-advised fund (DAF) solves it by splitting two decisions that normally happen together:
The tax decision: you contribute to the DAF this year, and (if you itemize) take the deduction this year.
The giving decision: you recommend grants to charities over the next several years, on your own schedule.
Simple, but know what you're signing up for:
Gifts to a DAF are irrevocable. The money is now charitable. You advise; you don't get it back.
Sponsors set the rules. Minimums, fees, investment menus, and which assets they accept vary.
DAF gifts don't qualify for the new non-itemizer deduction. That deduction is for people who don't itemize. DAFs are a tool for itemizers.
Grants are not a second deduction. You deduct when you contribute, not when you grant.
The Giving Rule: five questions, in order
Run these before you write a single check.
1. Do I itemize this year, or am I close? If you're nowhere near itemizing, bunching is the lever. If you already itemize comfortably, you may not need it. Your CPA can project this in an hour.
2. What am I going to give in the next 3–5 years? Add it up. A number you can write down beats a feeling.
3. Which assets are cheapest to give? Rank what you own by embedded gain. The shares with the largest gain held longer than a year are usually the best candidates to give. Shares that are below what you paid are the opposite: usually better to sell, take the loss, and give the cash. (Mind the wash-sale rule if you plan to buy something similar back. Ask your CPA.)
4. Does giving these shares fix a problem I already have? If you hold too much of one stock, a gift can be a tax-efficient way to trim it. If you already planned to cut that position, gifting is worth considering for part of it. This isn't a reason to give more than you intended. It's a reason to give from the right place.
5. Where does the gift go: charity directly, or a DAF? Giving everything to one charity this year? Direct may be simplest. Giving to many, or over many years? A DAF is likely the tool.
If you're 70½ or older, ask about qualified charitable distributions from an IRA. They follow different rules and can work alongside everything above.
Your next four weeks
Giving stock isn't a same-day transaction. Transfers take time, and sponsors often have year-end cutoffs. Treat this like a project, not an errand.
This week (by Fri Nov 13)
Write down your next 3–5 years of giving. One number.
Pull your brokerage's unrealized gain/loss report. Sort by largest gain and note holding periods.
Ask your CPA two questions: "Will I itemize this year?" and "What does bunching do for me under the 2026 floor?"
By Thanksgiving (Thu Nov 26)
Choose where the gift goes: a charity directly, or a DAF.
If it's a DAF, open the account and ask for its year-end cutoff for stock transfers and its minimum.
If you're giving directly, call the charity and ask for its brokerage transfer instructions. Many have a process.
First week of December
Start the transfer. Confirm the date the gift is received, not just the date you initiated it.
Get written acknowledgment from the charity or sponsor. Keep it with your records.
Tell your CPA what moved and when, so the paperwork matches the return.
After the gift
Don't buy back the shares just because the stock "feels cheap." If you want the exposure, decide it by rule, not by the thing you just gave away. A gift is a decision; the repurchase is a new one.
If you can, set the grant schedule from the DAF now so the cash doesn't sit unspent. Giving was the point.
Where this goes wrong
Giving stock you're underwater on. You lose the loss. Sell it, then give the cash.
Giving shares held less than a year. Different, usually less favorable rules apply.
Waiting for the last week. Transfers stall. Cutoffs exist.
Letting the tax tail wag the dog. You give because you want to. The tax work only decides what you give with. A gift that wouldn't make sense without the deduction usually doesn't make sense with it.
Doing it alone. Deduction limits, carryforwards, state rules, and AMT interactions are real. This is a CPA-plus-advisor project.
The bottom line
You're going to give anyway. So spend a few hours deciding what you give with, and when.
Rules over feelings: write down what you intend to give, give from the assets with the biggest gain, bunch when the floor says to, and keep the decision separate from the portfolio.
Boring is the goal. A good giving plan should feel like that.
Want a second set of eyes?
If you'd like to see how a gift would fit alongside your equity, your tax picture, and the written process behind how we manage your portfolio, our team can walk through it. Start a conversation here: https://www.forecastcapitalmanagement.com/start. Tell us a little about your situation, and a member of our team will reply within one business day with times for a 20-minute fit call.
If a big part of your giving question is what's in the portfolio you're giving from, our Exec Comp Optimizer shows how much of your investable assets sits in a single stock: https://www.forecastcapitalmanagement.com/exec-comp-optimizer
Jason Hilliard is Managing Director of Forecast Capital Management.
Disclosure: This article is for educational purposes only and is not investment, tax, or legal advice, nor a recommendation to buy, sell, or hold any security or to make any charitable gift. Examples are hypothetical, use assumed tax rates, and are simplified; they don't reflect any client's situation. Tax rules, limits, and thresholds change and depend on your facts, including state taxes, AMT, and deduction limits. Gifts to donor-advised funds are irrevocable. Consult your CPA or tax attorney before acting.
