Listed
securities are considered immediate gifts and
include stocks, bonds, bills, mutual funds and
futures that are traded on approved stock exchanges
in Canada and certain other countries. When such an
investment is converted to cash the realized Capital
gain is taxable. You can decrease the financial
impact this will have by donating your publicly
listed security directly to a charitable
organization. In 2006, the CRS eliminated the
capital gains tax on gifts of securities to
registered charitable organizations.
Advantages:
You
become entitled to a charitable income tax
deduction for the fair market value of the
gifted securities at the end of the day on the
date the securities are received in our
brokerage account
Your
standard capital gains tax rate on gifts of
publicly listed securities is reduced to zero.
This means that when you transfer publicly
listed securities to the Alzheimer
Society Niagara Foundation, you will not pay any capital gains tax
on the appreciated value of those shares
A
gift of securities to the Alzheimer
Society Niagara Foundation can be made for much less than the net
cost of an equal gift of cash. By donating the
securities you eliminate the capital gains tax
that would ordinarily become due if you had sold
the appreciated securities on the open market
and donated the proceeds from the sale to
charity. Please see the example below of the tax
savings you could gain
Your
charitable deduction can be claimed against up
to 75 per cent of your net income and any unused
deductions can be carried forward throughout the
next five years
It’s easy
and simple to do! Talk to your estate planner or
attorney for full details.
Example:
Sell Shares & Donate
Donate Shares Directly
Present value of shares
$100,000
$100,000
Purchase price of shares
$20,000
$20,000
Capital gain on shares
$80,000
$80,000
Taxable amount of capital gain
$40,000
$0
Tax payable* on capital gain
$18,000
$0
Tax credit on donation
$45,000
$45,000
Total Tax Saving
(Tax credit only)
$45,000
(Credit plus tax saving) $63,000
*For
illustration purposes we have used an average
marginal tax rate of 45%.