Many people find that by donating stocks, bonds, or shares in mutual funds they can give a larger gift than they ever thought possible.
When you make a gift of appreciated securities, you receive two tax savings: 1) your tax receipt for fair market value that generate a tax credit, and 2) you pay no capital gains tax. This means the after-tax cost of giving securities is less than making the same gift of cash.
For example, Mr. Donor gives CCFC publicly listed securities that purchased for $60,000 and now worth $100,000. The capital gain is $40,000. Mr. Donor’s combined federal and provincial tax rate is 45%. (His other charitable contributions exceed $200.)
|
Sell shares and donate cash |
Donate stock |
| Fair market value of shares |
$100,000 |
$100,000 |
| Cost base |
$60,000 |
$60,000 |
| Capital gain |
$40,000 |
$40,000 |
| Taxable portion of gain |
At 50% $20,000 |
At 0% $0 |
| Donation Tax Credit at 45% |
$45,000 |
$45,000 |
| Tax Payable on Gain at 45% |
$9,000 |
$0 |
| Tax savings |
$36,000 |
$45,000 |
| Net cost of $100,000 gift |
$64,000 |
$55,000 |
This means that if you are in the top marginal income tax bracket, have made other charitable contributions exceeding $200, and you give $100,000 worth of appreciated securities instead of cash, you would save an additional $9,000 in taxes.
In addition, by making a gift of securities, you receive:
- A charitable deduction for the fair market value of the stock at the time CCFC receives it
- Eliminate the capital gains tax on the securities donated
- Acknowledgement, recognition, and naming opportunities for the value of the tax receipt
To learn more about how a gift of securities to CCFC can help you meet your personal financial and giving goals we encourage you to speak with your financial adviser and then contact Valerie Rodney at 905-754-1001 or 1-800-263-5437 ext. 338 or vrodney@ccfcanada.ca.