GF592 Unit 7 Charitable Bunching Timing Memo Example

Course	GF592 Income Tax Planning and Strategies
Unit	Unit 7
Paper type	Timing strategy memo
Length	About 850 words, 6 pages double-spaced
Format	APA 7 student paper
School	Purdue University Global
Program	MS in Finance
Updated	October 2026

Free sample paper for GF592 Unit 7

Three Years of Gifts in One: A Unit 7 Timing Strategy Memo on a Donor-Advised Fund

[Student Name]

Purdue University Global

GF592: Income Tax Planning and Strategies

Unit 7 Timing Strategy Memo

[Instructor Name]

[Date]

The couple, their income, giving and holdings are composite and illustrative; the memo uses federal law for tax year 2025, the year of the contribution, and notes the rules that change in 2026; the sources cited are real.

What this part is doingLeading with the problem, the move and the net benefit follows memo form and gives the couple the answer first.

To: The couple From: Planning Analyst Re: Timing your charitable giving

Recommendation

Before December 31, 2025, contribute shares worth $42,000 to a donor-advised fund. Use shares held more than a year with a low cost basis. Then recommend grants of $14,000 a year to your usual charities from the fund in 2025, 2026 and 2027.

Why Your Current Giving Saves Nothing

Your adjusted gross income is $236,000, and your federal marginal rate is 24 percent. Your itemized deductions are $9,600 of state and local taxes and $14,000 of gifts, a total of $23,600. You have no mortgage. The 2025 standard deduction for a married couple is $31,500. Because your itemized total is lower, you take the standard deduction every year, and your gifts reduce your tax by nothing.

The Three-Year Comparison

Baseline. In each of the three years you give $14,000 and take the standard deduction. Tax saved by giving: zero.

Strategy. In year one you contribute $42,000 to the fund. Your itemized deductions become $9,600 plus $42,000, or $51,600, which is $20,100 more than the standard deduction. At 24 percent, that saves $4,824. In years two and three you take the standard deduction, exactly as in the baseline. The charities receive $14,000 a year in both cases.

The gifts themselves do not change; only their timing does, and moving three years of giving into one year lifts the couple above the standard deduction once instead of leaving them below it three times.

What this part is doingThe highlighted sentence explains the mechanism in a single line, which is what a client needs to understand the recommendation.

Why Give Shares Instead of Cash

You hold index fund shares worth $42,000 that you bought for $17,500 several years ago. Giving them directly to the fund lets you deduct their full market value and never pay tax on the $24,500 of appreciation. If you sold them instead, you would owe about $3,675 of capital gain tax at 15 percent. Because the gain would also push your income above the $250,000 threshold for the net investment income tax, you would owe another $399 (Internal Revenue Service, 2025b). The shares must have been held more than one year; shares held a year or less would be deductible only at cost.

Costs and Limits

1. Fund fees. The sponsor charges about 0.60 percent a year on the balance, roughly $420 over the two years the money is invested.

2. Liquidity. The contribution is irrevocable. Once made, the money can only go to charity.

3. Percentage limits. Gifts of appreciated shares to a donor-advised fund are deductible up to 30 percent of adjusted gross income, here $70,800. Your $42,000 gift is well within it (Internal Revenue Service, 2025a).

4. Rules that change in 2026. Starting in 2026, the first half percent of income given each year earns no itemized deduction, which for you would erase about $1,180 of gifts. Making the contribution in 2025 avoids that floor. Also from 2026, couples who take the standard deduction can still write off as much as $2,000 a year given in cash straight to a charity, but a contribution to a donor-advised fund does not count.

Net Benefit

Tax saved by bunching is $4,824. Capital gain tax avoided is $3,675, and net investment income tax avoided is $399. Fund fees of about $420 reduce the total to about $8,478.

Research on donor-advised funds finds that bunching became much more common after the standard deduction rose in 2018, because many households who had itemized every year no longer could (Walker, 2023).

Why Not Simply Give More Each Year

You asked whether giving more each year would achieve the same result. To itemize every year you would need gifts of about $21,900 a year, $7,900 more than you give now, and only the amount above the standard deduction would produce any benefit. Bunching reaches the same tax result without asking you to give more in total. It changes only when the deduction is claimed, which is why it suits a couple whose giving is steady and whose other deductions are modest.

What You Give Up

You lose some flexibility. If a charity you support closes or your priorities change, the fund can make grants to other public charities, but the money cannot come back to you. You also commit to giving at least $42,000 over three years, which matches your history.

Action List

1. By November 30: open the fund account with the sponsor. Owner: the planner, with both spouses signing.

2. By December 10: instruct the broker to transfer the shares in kind. Owner: the planner.

3. By December 20: confirm receipt and obtain the written acknowledgment, which you need for the deduction. Owner: the couple.

4. In January: recommend the first grant of $14,000.

What this part is doingAssigning each step an owner and a date turns the analysis into something the couple can carry out before the deadline.

References

Internal Revenue Service. (2025a). Charitable contributions (Publication 526). https://www.irs.gov/publications/p526

Internal Revenue Service. (2025b). Investment income and expenses (Publication 550). https://www.irs.gov/publications/p550

Walker, D. (2023). Donor-advised funds in the wake of the Tax Cuts and Jobs Act. Columbia Journal of Tax Law, 14(1), 1-29. https://doi.org/10.52214/cjtl.v14i1.11798

What the GF592 Unit 7 assignment asks for

The Unit 7 memo in GF592 asks you to recommend a change in timing and to show its value year by year. Address the client directly and put the recommendation first, with dates. Then explain why the current pattern produces no benefit, using the client's own figures against the standard deduction. A comparison of at least three years should set the baseline beside the strategy so the reader can see that the total giving does not change. Where a better asset can fund the move, such as appreciated shares instead of cash, price that separately. List the costs and limits honestly: fees, irrevocability, percentage-of-income caps and any rule changes on the horizon. Add up the net benefit, answer the obvious alternative the client might raise, and say plainly what they give up. Close with an action list that names who does each step and by when, and cite IRS Publications 526 and 550 in APA 7.

How this GF592 Unit 7 example is built

The memo opens with its recommendation: contribute $42,000 of long-held, low-basis shares to a donor-advised fund before December 31, 2025, and recommend $14,000 grants in each of three years. A second section shows that $9,600 of state and local tax plus $14,000 of gifts reaches only $23,600. The three-year comparison sets zero savings in the baseline against $4,824 in the strategy year, and the highlighted sentence explains that only timing has changed. A section on shares shows the $24,500 of appreciation escaping tax. The cost list names the 0.60 percent fund fee, irrevocability, the 30 percent limit and the half-percent floor that begins in 2026. The net benefit section totals $8,478 and cites Walker's analysis of donor-advised funds after 2018. The couple's question about larger annual gifts is answered, the loss of flexibility is stated and a dated action list closes the memo.

Reading the GF592 Unit 7 grading rubric

In this GF592 memo, the rubric places much of its weight on a recommendation the client can act on, supported by a correct comparison. A clear statement of why the current giving saves nothing is essential, since every later figure measures against it. The multi-year table carries substantial credit: it must keep total gifts constant and show the saving only in the year it occurs. Instructors reward the second layer of planning, where appreciated shares replace cash, because it shows the writer looked for more than one source of value. An honest list of costs, including rules that change in later years, separates professional advice from a sales pitch. Answering the client's likely objection demonstrates audience awareness. The action list with owners and dates is scored on whether someone could follow it. IRS publications and a law review article on donor-advised funds, cited in APA 7, support the limits used.

Common GF592 Unit 7 mistakes, and how to avoid them

Weak GF592 Unit 7 memos describe bunching in general terms and never show the couple's own numbers falling short of the standard deduction. Some compute the strategy year's saving and forget that the following years revert to the standard deduction, which makes the benefit look three times larger than it is. Writers often recommend a cash gift when the client holds appreciated shares, missing the larger saving. Costs and limits get left out, especially fund fees and the fact that a contribution cannot be reversed. Rule changes for later years are a common oversight; a memo written for 2025 should say why acting before January matters. An action list without dates or owners leaves the plan unfinished. Memos also slip into a textbook tone. Write to the clients by name or as "you," keep the arithmetic short and visible, and deal with the objection these two clients would raise first, giving more each year, before they raise it.

Get a GF592 Unit 7 example written to your instructions

Share the taxpayers' income, deductions, giving pattern and assets from your GF592 Unit 7 prompt, the tax year named and the rubric. A custom memo prices the timing move in every year it touches, compares it with the current pattern, counts costs and lists actions with owners and dates. First sample costs nothing; 24-48h. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.

More GF592 papers and MS in Finance samples

GF592 Unit 7 questions, answered

Is a donor-advised fund required for bunching?

No. A couple can simply give three years of gifts directly to the charities in one year. The fund lets them take the deduction now while spreading grants over time, which keeps the charities' income steady. The sample uses a fund for that reason and says so, noting its fees as the cost of that convenience.

Why must the donated shares be held more than a year?

Because the deduction for appreciated property given to a public charity generally equals fair market value only when the gain would have been long-term. Shares held a year or less usually produce a deduction limited to basis. The sample confirms the holding period for the shares it selects before counting the avoided gain.

Where can I find a free GF592 Unit 7 sample paper?

This page carries a full GF592 Unit 7 timing strategy memo that moves three years of charitable gifts into one donor-advised fund contribution, with a three-year comparison, costs, an action list and APA 7 references.

Why give appreciated shares instead of cash in the GF592 Unit 7 memo?

Because a gift of shares held more than a year is deductible at market value, and the appreciation is never taxed. The sample's shares carry $24,500 of gain, so giving them avoids about $3,675 of capital gain tax that a sale followed by a cash gift would trigger.

What changes for charitable deductions in 2026?

Beginning in 2026, the first half percent of income given each year produces no itemized deduction, and taxpayers who take the standard deduction gain a limited deduction for cash gifts. Both changes make a large gift completed in 2025 more valuable for this couple.