If the markets have been good to you this year and you’d like to do something good in return, consider a gift of securities to ArtSea.
Donating listed securities that have appreciated in value is win-win. You’ll get a donation tax credit and – thanks to a further tax break on in-kind donations of listed securities – avoid capital-gains tax on any appreciation in the value of the shares. ArtSea can then use your donation to support art and cultural activities in our community.
Here’s how it works as reported by John Heinzl, Investment Reporter for the Globe and Mail:
- Say you plan to donate $10,000 of shares that have an adjusted cost base of $2,000.
- If you were to sell the shares first and donate the cash, you would have to pay tax on the $8,000 capital gain. Assuming your marginal tax rate on regular income is 50 per cent, you’d pay capital-gains tax of 25 per cent – or $2,000.
- But if you instead donate the $10,000 in shares to ArtSea, no capital-gains tax applies.
- What’s more, in both cases you would also receive a charitable donation receipt for $10,000. Depending on the province or territory, your gift would produce a charitable donation tax credit worth at least 40 per cent, or $4,000.
Wondering how large your tax credit would be? The federal government has an online charitable donation tax credit calculator.
We’d be happy to meet to discuss your generous gift. Call 250.656.7400 or email firstname.lastname@example.org.
“Donating securities ‘in-kind’ is perhaps the most missed opportunity in charitable giving,” says Jamie Golombek, managing director,for tax and estate planning with Canadian Imperial Bank of Commerce.