EFTA02646406

From: Barry J. Cohen Sent: Thursday, June.... To: Jeffrey E. Subject: Art/DAFs--PRIVILEGED AND CONFIDENTIAL When Leon wants to sell art at a gain, I think he sh=uld first give it to a donor advised fund (DAF), and let the DAF consummat= the sale. Then he can use the proceeds to make charitable his norma= donations through the DAF. He avoids all capital gains taxes. He gets to deduct only his basis (because o= the tax rules on donating collectibles), but I think he's still bet=er off. Right now, he sells art with a gain and pays taxes, =nd donates to charities with after tax dollars. Downsides • He can't use a DAF to pay off charitable pledges. However=he has plenty of non-pledge charitable activity • If =he charity is an art charity and will accept a painting, it might be bette= for him to donate the painting directly to the charity. The charity actually gets the donation from the DAF, not LDB. Mos= DAFs let the donor establish a named foundation or fund ("Leon Blac= Family Fund") and the transmittal letters have both the OAF name and the donor suppled names on them. • The DAF actually has to sell it through Sotheby's or whatever=and will charge a little extra to make that happen. In reality, we w=11 set up the entire sale with Sotheby's, and the DAF will just collect a check. The handling charge from the OAF shou=d be small. Am I missing anything? Barry J. Cohen = President and Speci=l Counsel I Elysium ManagementALC I 445 Park Avenue Suite 1401 New York, NY 1002284=bsP; 1 EFTA_R1_01883192 EFTA02646406 Tel. (646) 589.0322 I Cell > &n=sp; 2 EFTA_R1_01883193 EFTA02646407