Back to home page
Publicly listed securities are a cost-effective way to transform an asset into an immediate and significant form of support for Breakfast Club of Canada—and an interesting alternative to a cash donation.
By donating shares, bonds, mutual funds or stock options, you will be exempt from any capital gains tax. You will also be entitled to a tax receipt for the fair market value of your assets, reducing the amount of tax you have to pay.
https://www.youtube.com/watch?v=76x-JK0bZsk
A donor wishes to donate $50,000 to Breakfast Club of Canada.
They possess publicly listed securities with unit market value of $100 and an acquisition cost of $20.
Let’s compare the cost of a cash donation and publicly listed securities.
| Scenarios | A. $10,000 cash donation | B. Donate $10,000 in shares | C. Donate $15,000 in shares |
|---|---|---|---|
| Amount of donation | $10,000 | $10,000 | $15,000 |
| Cost to acquire shares | $0 | $2,000 | $3,000 |
| Capital gain (= FVM – Cost of acquisition) |
$0 | $8,000 | $12,000 |
| Savings from capital gains tax exemption (50% x Capital gain (C)) x (Tax rate (50%)) |
$0 | $2,000 | $3,000 |
| Net tax savings from donation (Amount of donation (A) x Tax rate (50%)) |
$5,000 | $5,000 | $7,500 |
| Net cost of donation
Amount of donation (A)- Savings from capital gains tax exemption (D) – Net tax savings from donation (E) |
$5,000 | $3,000 | $4,500 |
The content provided on this page is for informational purposes only and is not meant to serve as legal or professional advice. Before taking any action based on this information, it is crucial that you consult with your own legal or financial advisors. This will ensure that any steps you take are well-informed and tailored to your specific financial and estate planning needs.