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For example...
Let’s say you wish to make a charitable gift of $10,000 worth of
shares that cost you $4,000 to purchase initially. Your capital
gain would be $6,000 (or the difference between the purchase
price and the current price).
If you sell the stocks and donate the proceeds, you would receive a
charitable tax credit for your donation, but would be assessed
capital gains tax on 50% of the increase in value of the stocks
(or $3,000).
However, donating the stocks directly to MAF would entitle you to a
charitable tax credit for the donation AND an exemption from any
capital gains tax - resulting in a reduction in tax owed of
roughly $1,350*
(depending on your tax bracket).
A charitable donation of publicly-traded securities would result in
a tax receipt for 100% of the value of the gift on the day of the
transfer. By providing a larger potential deduction than an
equivalent gift of cash, this option allows you to maximize your
charitable giving.
The most effective way to donate stocks or
securities to MAF is to have the shares electronically transferred
from your brokerage account to MAF’s account. Our Gift Planning
Department would be pleased to provide you with additional details
and instructions.
* This example assumes a 45% marginal tax rate (combined federal and
provincial rates). Actual marginal tax rates vary from province to
province and depend on your income level. Please consult your
financial planner.
Frequently Asked Questions
What are the benefits of transferring investment properties?
By donating gifts of shares directly to MAF rather than selling them
and gifting the proceeds, you can;
How long will my transfer take?
The time required to transfer different securities varies, and may
take between 10 and 25 business days from the time the Authorization
to Transfer form is received by the delivering institution.
What will it cost to transfer my securities?
In many cases, there is no cost to transfer your securities. Please
check with your financial institution for details.
When is the value of the securities determined for gift purposes?
The securities are deemed to be transferred on the day the
securities are received by the delivering institution. The closing
value of the securities on the day they are received by MAF is the
value that will show on the official receipt for income tax purposes
issued by MAF.
What types of investment products are eligible for the favorable tax
treatment?
Securities are a special form of capital property, and include
stocks, bonds, and mutual funds. Securities are portable,
transferable, marketable, and easy to value.
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