Gifts Of Shares: Capital Gains Tax Removed
 There is great news regarding gifts of shares proposed
by the federal government in the last budget.
As a Canadian donor to Light up the World, you may consider the
benefits of a donation of shares in a publicly traded company.
Effective May 2, 2006, gifting securities to a registered charitable
organization are no longer subject to capital gains tax, and
a donation of publicly traded securities provides donors with
a significant tax savings.
- Gifts
of publicly-traded securities to Light Up the World can be
made as a direct transfer of securities from your account to
our brokerage account, or you may simply deliver your endorsed
stock certificate to Light Up the World.
- Gifts of publicly-traded securities are eligible for a tax
receipt for the fair market value of the gift as assessed at
close of the market on the date of transfer or delivery.
- It is our general policy to sell gifted shares as quickly
as possible, without disturbing the market. Proceeds of the
sale equal to the value at donation will be transferred to
your chosen program or project.
Light Up the World planned giving staff are pleased to provide
step-by-step guidelines, including a sample gift confirmation
letter, to assist you in your donation of publicly-listed securities.
We can also offer a legal document template that allows individual
donors to irrevocably gift an intended gift of shares before the
actual transaction occurs.
Tax Benefit for gifts of publicly traded securities
When donating an appreciated security to LUTW you will save
the tax, and receive a tax receipt for the entire amount. If
you donate 1,000 shares to LUTW, that are now worth $1.00.
You receive a $1,000 tax receipt, offering approximately
40-45% (depending on province and income levels) in taxable
benefit to you. If you paid $.20 per share, you save
the capital gains tax that you would have owed through a
personal sale of the shares, this is an additional saving
to you by making this gift, in addition to the benefit offered
through the tax receipt, or approximately $.16-.20 per share.
The Added Benefit of Flow Through Shares
The
tax break is simple: For every dollar of flow through
shares bought, you save $0.40 of tax for the flow-thru deduction
immediately (based on your taxable income). When you
donate the share to charity, you get a tax credit of about
40% of the market value of the shares at the time of
donation. So, if the stock stays flat the total tax saved
is up to $0.80 for every dollar donated! If it goes
up to $1.50 then the tax saved is $1.00 or more for every dollar
donated, essentially a no cost contribution!
We encourage you to contact your tax advisor to achieve maximum
impact for your charitable gift.
For details on options for donation please
contact:
Roselyn Himann
Email: r.himann@lutw.org
Telephone: 403-630-1395
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