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One of the most cost-effective ways to support
Canadian Feed The Children is through a gift of publicly listed
securities. Making a gift of securities is simple and offers a
number of valuable benefits:
- Securities are easily handled and can even be transferred electronically
- You can donate stocks, bonds, mutual funds, bills, futures and/or warrants
- By giving the securities directly to Canadian Feed The Children, your taxable capital gain is eliminated
- You receive a charitable tax receipt for the total value of the stock upon transfer
- If your donation exceeds the amount eligible for a tax credit in the year your gift is made, the excess credit may be carried forward up to five years.
- If you leave securities to Canadian Feed The Children through your Will, your estate will receive the same tax benefits.
How does it work?
When making a gift of securities, decide which securities or mutual fund holdings you wish to donate. Then instruct your broker to transfer the shares electronically or endorse the share certificates and forward them to the Canadian Feed The Children. You'll receive a tax receipt for the closing price of the securities on the date they are received in the Canadian Feed The Children brokerage account.
If you wish to donate stock or are acting on behalf of a donor who plans to contribute securities:
Tax Savings Example:
On May 2, 2006, the Federal Government announced that all donations of publicly listed securities to charities will be exempt from capital gains tax. This can mean great savings in after-tax cost giving when compared to selling the securities outright and making the same gift of cash.
The example below compares the possible tax savings for an individual donor on a donation of $100,000 in publicly traded securities to Canadian Feed The Children against the proceeds from simply selling the shares to make the donation.
Mr. Smith gives Canadian Feed The Children publicly listed securities that he purchased for $60,000. The securities are now worth $100,000. The capital gain is $40,000. Mr. Smith’s combined federal and provincial tax rate is 46.5%.
Individual
Giving to
Canadian Feed The Children |
Sell
Shares and
Donate Cash |
Donate
Appreciated Securities |
Fair
Market Value |
$100,000 |
$100,000 |
Base
Cost of Securities |
$60,000 |
$60,000 |
Capital
Gain on Securities |
$40,000
|
$40,000 |
Taxable
Portion of Capital Gain |
$20,000
(50%) |
$0
(0%) |
Capital
Gain Tax Liability |
-$9280
(46.4%)* |
$0
(46.4%) |
Donation
Tax Credit @ 45%* |
$45,000 |
$45,000 |
Net
Tax Saving by Making the Donation |
$35,720 |
$45,000 |
Tax
Benefit of Donating Securities |
$9280 |
*The estimated tax credit for donations is valued at approximately 45% income, for the portion in excess of the $200 threshold. The marginal tax rate for each province and individual is different — 46.4% represents the highest marginal rate for Ontario. These figures are for illustration purposes only—each individual should obtain professional tax advice to understand his or her unique situation. To learn more about how a gift of securities
can help meet your personal, financial and charitable goals, please
contact Kristin Philpot by email
or toll-free 1-800-387-1221, ext. 241. |
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