The Most Tax-Efficient Way to Make Charitable Donations
Donating publicly traded securities (stocks, bonds and mutual funds) is the most tax-efficient way to make charitable donations. When publicly traded securities are donated “in-kind” to a Canadian charity like Abundance Canada, the capital gains inclusion rate drops from 50% to 0%.
If you donate the securities from within your corporation, you will realize an additional benefit; the tax-free portion of the capital gain is added to your corporation’s Capital Dividend Account (CDA).
When a corporation donates publicly traded securities, the entire capital gain is tax-free, so 100% of the capital gain is added to the CDA. A positive balance in the CDA can be paid out to shareholders as a tax-free dividend.
| 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%) |
| Increase in the CDA | $20,000 (50%) | $40,000 (100%) |
Abundance Canada makes donating securities easy
Abundance Canada makes it easy to process gifts of publicly traded securities. Our team of Gift Planning Consultants will work with you or your Professional Advisor to explain our process and work out the details.
In 2022, Abundance Canada processed over $15.18 million* in donations of publicly traded securities.
For more information, review our information sheet on a Gift of Publicly Traded Securities by a Corporation.
Contact us or call 1.800.772.3257 to speak with a gift planning consultant today about how you can donate a gift of publicly traded securities to your favourite causes.
*Unaudited Number
Forms
To initiate an in-kind gift of securities please download and complete the applicable form.