Tax Advantages of Donating Securities
Make a bigger impact by donating securities and mutual funds.
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A donation of securities or mutual fund shares is the most efficient way to give charitably. With a donation of securities or mutual funds, capital gains tax does not apply, allowing you to give more and avoid paying capital gains taxes. Learn more about charitable tax credits here.
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Let’s say you purchased common shares in ABC Company for a cost of $1,000 and a few years later they now have a current market value of $5,000. You would have a capital gain of $4,000.
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The chart below illustrates what happens if you sell the shares and then donate the after-tax proceeds and what happens if you donate the shares directly.
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Sell securities for cash. Donate after-tax proceeds. |
Donate securities directly with the help of your investment advisor. |
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Original Cost of Securities |
$1,000.00 |
$1,000.00 |
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Current Market Value |
$5,000.00 |
$5,000.00 |
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Capital Gain |
$4,000.00 |
$4,000.00 |
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Tax on Capital Gains* |
$920.00 |
$0.00 |
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Donation Amount After-Tax |
$4,080.00 |
$5,000.00 (Rideau Waterway Land Trust receives $920 more!) |
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Your Charitable Tax Credit* |
$1,876.00 |
$2,300.00 (Your charitable tax credit is $424 more!) |
*Example amounts. Exact amounts depend on the province you pay taxes in and your marginal tax bracket.
If you are interested in donating securities to the Rideau Waterway Land Trust, speak with your investment advisor and email us at info@rwlt.org.
Information from: https://www.canadahelps.org/en/why-canadahelps/ways-to-give/benefits-of-donating-securities/