Canada Helps now accepts gifts of securities online.
With the elimination of capital gains on donations of publicly traded
securities last year, gifts of securities are now the most tax efficient way
to make a charitable donation ... and a great way for donors to make a
greater impact with their gift.
What counts as publicly listed securities?
Your donation must be of securities that are traded on a public market in
Canada or the United States. This includes stocks, bonds, and mutual
funds, but excludes shares in a private corporations and stock options.
How do I actually save more and give more by donating gifts of
securities?
Let’s say you purchased common shares in ABC Company for a cost of
$1,000. If the current market value of the shares has increased to $5,000,
you would have a capital gain of $4,000. If you sell these shares, and
donate the cash, you would need to pay tax on the capital gain. Instead,
by donating the shares, you get a tax receipt for the $5,000 and pay zero
capital gains tax. As a result, you now have a tax credit of $2,300, which
is $920 more than if you had sold the shares and donated the proceeds.
Thus, this method of giving is more tax-efficient.
With the elimination of capital gains on donations of publicly traded
securities last year, gifts of securities are now the most tax efficient way
to make a charitable donation ... and a great way for donors to make a
greater impact with their gift.
What counts as publicly listed securities?
Your donation must be of securities that are traded on a public market in
Canada or the United States. This includes stocks, bonds, and mutual
funds, but excludes shares in a private corporations and stock options.
How do I actually save more and give more by donating gifts of
securities?
Let’s say you purchased common shares in ABC Company for a cost of
$1,000. If the current market value of the shares has increased to $5,000,
you would have a capital gain of $4,000. If you sell these shares, and
donate the cash, you would need to pay tax on the capital gain. Instead,
by donating the shares, you get a tax receipt for the $5,000 and pay zero
capital gains tax. As a result, you now have a tax credit of $2,300, which
is $920 more than if you had sold the shares and donated the proceeds.
Thus, this method of giving is more tax-efficient.
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*Minus Transaction fee
Total benefit of donating $5,000 of appreciated securities over an
equivalent gift of cash: $920.
*This information provided is general in nature, does not constitute legal or
financial advice, and should not be relied upon as a substitute for professional
advice. We strongly encourage you to seek professional legal, estate planning
and/or financial advice before deciding upon your donations to charity.
How long does it take for my donation to reach the charity?
That depends. Generally, most securities take a few days to get to
CanadaHelps once you’ve submitted the Letter of Authorization to your
financial advisor. Some securities however, can take a few weeks, e.g.,
mutual funds. Once CanadaHelps receives the securities and they are
sold, we distribute them to the charity in the next disbursement cycle. It
can take as little as a week.
How much actually goes to the charity?
As the donation of securities is a transfer in ownership, it is subject to
the fee structure you have set up with your broker. CanadaHelps will not
levy any transfer fees however, there is a nominal 3% transaction fee.
This amount covers all brokerage fees, transaction fees, banking costs,
receipting, reconciliation, and disbursements incurred by CanadaHelps.
This 3% is deducted based on the proceeds of the sale of securities you
donated, before the donation is sent to the charity, and is a modest
charge for the service that CanadaHelps provides to Canadian donors
and the charities they support.
How and when do I get my tax receipt?
You will receive your tax receipt after your securities have been
received in the CanadaHelps brokerage account, and then subsequently
valued based on closing bid price. Please note: according to the
guidelines of the Canada Revenue Agency (CRA), the actual value of
your donation for tax receipt purposes will be determined on the day
that your donation is received in the CanadaHelps brokerage account.
What are the next steps?
1. Complete the online form.
2. Submit the Letter of Authorization to your financial advisor.
3. Securities are transferred to CanadaHelps.
4. CanadaHelps sends you a tax receipt.
5. Securities are sold and the donation is forwarded to your charity of
choice.
Information provided by www.canadahelps.org
Total benefit of donating $5,000 of appreciated securities over an
equivalent gift of cash: $920.
*This information provided is general in nature, does not constitute legal or
financial advice, and should not be relied upon as a substitute for professional
advice. We strongly encourage you to seek professional legal, estate planning
and/or financial advice before deciding upon your donations to charity.
How long does it take for my donation to reach the charity?
That depends. Generally, most securities take a few days to get to
CanadaHelps once you’ve submitted the Letter of Authorization to your
financial advisor. Some securities however, can take a few weeks, e.g.,
mutual funds. Once CanadaHelps receives the securities and they are
sold, we distribute them to the charity in the next disbursement cycle. It
can take as little as a week.
How much actually goes to the charity?
As the donation of securities is a transfer in ownership, it is subject to
the fee structure you have set up with your broker. CanadaHelps will not
levy any transfer fees however, there is a nominal 3% transaction fee.
This amount covers all brokerage fees, transaction fees, banking costs,
receipting, reconciliation, and disbursements incurred by CanadaHelps.
This 3% is deducted based on the proceeds of the sale of securities you
donated, before the donation is sent to the charity, and is a modest
charge for the service that CanadaHelps provides to Canadian donors
and the charities they support.
How and when do I get my tax receipt?
You will receive your tax receipt after your securities have been
received in the CanadaHelps brokerage account, and then subsequently
valued based on closing bid price. Please note: according to the
guidelines of the Canada Revenue Agency (CRA), the actual value of
your donation for tax receipt purposes will be determined on the day
that your donation is received in the CanadaHelps brokerage account.
What are the next steps?
1. Complete the online form.
2. Submit the Letter of Authorization to your financial advisor.
3. Securities are transferred to CanadaHelps.
4. CanadaHelps sends you a tax receipt.
5. Securities are sold and the donation is forwarded to your charity of
choice.
Information provided by www.canadahelps.org
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