Stocks and Bonds
Seeing your stock, bond, or mutual fund grow should be pleasing. Unfortunately, when you cash in any of these forms of investments, they become a form of taxable income. You can minimize the financial impact this will have while benefiting from tremendous tax incentives by donating your publicly listed security directly to Wycliffe College.
Giving Reduces Capital Gains Tax
When donating a gift of securities directly to any registered Canadian charity, the entire capital gain is eliminated under Canadian tax law. This means that there is no need to calculate the reportable capital gain, and the tax credit the gift triggers can be used to offset other income tax that you may be obligated to pay.
Making a Gift
Making a gift of securities to Wycliffe College is very easy. For example, Mr. J. Smith purchase ABC Company stock some years ago. The stock has a Fair Market Value (FMV) of $10,000 and his cost was $2,000. He has made recent charitable donations to Wycliffe College and has decided that he would like to make a substantial gift of support. When looking at his stock portfolio, he decided to give his ABC Company stock as a gift to the College. His combined federal and provincial tax rate and charitable tax credit is 50%. Here is an example of the real cost of giving the stock instead of selling the stock and donating the cash:
|
Option 1 Sell Stock & Cash |
Option 2 Donate Stock Directly |
|
| Value of Stocks | $10,000 | $10,000 |
| Cost Base | $2,000 | $2,000 |
| Capital Gain | $8,000 | $8,000 |
| Tax Credit (50% x $10,000) | $5,000 | $5,000 |
| Tax on Gain | $2,000 | $0 |
| Tax Saving | $3,000 | $5,000 |
The types of investments that qualify include: shares, bills, warrants, mutual funds and futures listed on stock exchanges. Also included are both RRSPs and pension plan benefits. If you are interested in giving listed securities to Wycliffe College, please contact Marion Disselkoen, Development Officer, at mdisselkoen@wycliffe.utoronto.ca.
