Donating Bonds: An Efficient Solution in Crisis
Donating bonds is a great option to explore when stock markets drop, and interest rates start to fall.
Individuals and corporations that donate publicly traded securities in-kind avoid paying the capital gains tax. Publicly traded securities are stocks, bonds, mutual funds and ETFs (Exchange Traded Funds) listed on a designated stock exchange.
With the decline in the stock markets, it can be easy for donors and their financial advisors to presume there is no longer any advantage to donating publicly traded securities.
Usually we only think about capital gains with stocks, mutual funds and ETFs; however, with the recent stock market declines we also saw interest rates falling. When interest rates drop the market value of bonds usually increases, which could result in significant unrealized capital gains on bonds you hold in your investment portfolio. Donating bonds in-kind results in the same tax efficiency as donating stocks, mutual funds or ETFs.
Abundance Canada has significant experience processing gifts of securities, including in-kind donations of bonds.
Contact your financial advisor to determine if your bonds have unrealized capital gains, and whether donating them in-kind might be a strategy you should consider.
If you are ready to donate bonds or have questions, contact an Abundance Canada gift planning consultant in your area at 1.800.772.3257 or email firstname.lastname@example.org.
Contributed by Sherri Grosz
Gift Planning Consultant