Charitable donations tax
tax planning opportunities for gifts of securities
In developing a tax plan for your customers,
ask yourself if they are open to donate to a charity. Customers holding shares having risen strongly can take advantage of new beneficial changes in tax rules, which have increased considerably quoted securities traded donations in recent years. The government reduced the inclusion rate of capital gains 0% for donations of publicly traded securities, eliminating the tax on capital gain triggered by the donation of such securities. This preferential tax treatment has proved a very effective measure to encourage people to make donations.
The listed securities, such as stocks, bonds, treasury bills, warrants and mutual funds, are all eligible. It is important to note that for this additional tax benefit, the charity should receive the listed security in kind.
Example: gifts of securities versus cash
Suzanne lives in Manitoba. Thanks to the direct donation option of charitable giving program, she donated to public charity of his choice of a security listed on the stock with a fair market value of $ 100,000 and a base price of $ 10,000. Its annual net income of $ 160,000 and other charitable donations totaling more than $ 200.
The annual contribution limit
The contribution limit for donations in kind whose value has appreciated is 75% of annual net income from all sources. Any excess can be carried forward in the future and called for the next five years.
The benefits for your customers
Now you can help your customers make their effective annual donations tax purposes. By transferring to benefaction their securities whose value has increased more strongly (as demutualized shares) through the charitable donation program, they can easily donate to the cause of their choice while eliminating tax on capital gains that would otherwise have been payable on the sale of these assets. In addition, they immediately receive a receipt for tax purposes equal to the fair market value of these securities.
Private foundations are also eligible for tax treatment similar to the gift of securities listed on the stock exchange they receive.
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