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 for the fair market value of the securities on the day they initiated the gift-in-kind transfer.
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 on the date they initiated the transfer to Abundance Canada
- Client uses donation receipt to off-set other income tax payable
You can view our Fee Model 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.