Discover the Tremendous Benefit of Donating Publicly Listed Securities to Charity
Donating publicly listed securities (stocks, bonds and mutual funds) is the most tax-efficient way to make charitable donations. When publicly listed securities are donated “in-kind” to a Canadian charity like Abundance Canada, the capital gains inclusion rate drops from 50% to 0%.
Instead of selling the securities, your client transfers them to Abundance Canada as a gift in-kind.
Abundance Canada will send your client a donation receipt that reflects the fair market value in Canadian dollars of the gift at the time it is deposited into our custodian’s account, the date the property is transferred to us.
Example of the Tax Advantage for a Donation of Securities to Charity
| Sell securities and donate cash | Donate securities as gift in-kind | |
|---|---|---|
| Donation to charity | $50,000 | $50,000 |
| Adjusted Cost Base | ($10,000) | ($10,000) |
| Capital Gain | $40,000 | $40,000 |
| Taxable Capital Gain | $20,000 (50%) | $0 (0%) |
| Marginal Tax Rate (example) | 40% | 40% |
| Tax Payable | $8,000 | $0 |
In this example, when the securities are donated directly to the charity as a gift in-kind, your client does not realize a taxable capital gain, saving them $8,000 in tax payable. The $50,000 donation receipt can then be used to off-set other income tax payable.
Tax Planning Tips:
- Eliminate the taxable capital gain on the donated securities
- Client receives a donation receipt based on the fair market value of the securities
- Client uses donation receipt to off-set other income tax payable
You can view our Fee Model Policy and Gift Acceptance Policy at https://abundance.ca/about/legal/
Next Steps
Call us at 1 (800) 772-3257 or contact us online if you have clients who might benefit from donations of publicly listed securities.
Forms
To initiate an in-kind gift of securities please visit our Forms page to download and complete the Gift in Kind Donation Form.