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Gifts of Securities


What it is:

Gifts of publicly traded securities are donations of stocks, bonds, or mutual funds. Since May 2006, the Income Tax Act has provided extra cash savings on capital gains for listed securities if they are transferred to a charity as a gift.


Benefits:                        

  • a tax receipt for the fair market value of the gift
  • exemption from the capital gains tax that typically applies to the sale of a security

How it Works:

  1. Choose the securities you wish to donate.
  2. Contact the charity of your choice.
  3. Transfer the securities to the charity’s brokerage account. Do not sell them or you will lose the potential tax savings of not paying capital gains tax.

Illustration:

 

Sell Security and Donate Cash

Donate to a Charity

Market value of security

$8,000

$8,000

Original cost of the security

$5,000

$5,000

Capital gain

$3,000

$3,000

Taxable capital gain (50%)

$1,500

$0

Assumed tax rate (45%)

$675

$0

Value of tax receipt at 45%

$3,600

$3,600

Net tax savings

$2,925

$3,600

 

Further Info:   

If you are considering a gift of securities and would like more information, we recommend that you consult with a qualified accountant or financial planner.

Gifts of Securities | Give Confidently. Give Generously.
2017-10-21 4:21:01 America/Toronto -04:00   https://giveconfidently.ca/ways-to-give/gifts-of-securities/