Donating a Gift of Securities
- you help MitoCanada while reaping the benefits of Canada’s generous charitable tax credit system
- you pay less tax because Capital Gains Tax is eliminated with appreciated GOS
- you get your tax receipt immediately for the fair market value (FMV) of the appreciated security
“Charitable securities donation might be the most tax-effective way to give. Donating stocks or mutual funds to a charity has additional benefits compared with cash or credit card gifts. One benefit is receiving a charitable receipt for the fair market value of the securities to claim as a donation on your tax return. In addition, you avoid paying capital gains tax on the entire accrued gain on those shares,” says Jamie Golombek, managing director of tax and estate planning at CIBC Private Wealth Management, in this Financial Post article.
The following example illustrates the benefit of gifting securities to make a donation versus
selling the securities and donating the cash to charity:
| Sell securities and donate proceeds | Donate securities directly to MitoCanada | |
|---|---|---|
| Fair Market Value | $10,000 | $10,000 |
| Initial cost of stock | $2,000 | $2,000 |
| Capital gain (FMV less cost) | $8,000 | $8,000 |
| Taxable gain | $4,000 (50%) | $0 |
| Tax payable on gain (43.7%) | $1,748 | $0 |
| Charitable gift receipt | $10,000 | $10,000 |
| Tax credit (43.7%) | $4,370 | $4,370 |
| Net tax benefit from donation | $2,622 | $4,370 |
Complete the digital form below to donate your GOS now, or read through this additional information.
