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For information regarding the tax benefits available to you when making a gift to Saint Mary's University please click here.
A tax change announced in the 2006 federal budget means you pay no tax on capital gains when you donate publicly listed securities (i.e. shares, bonds, mutual funds) to registered charities.
If you own publicly traded securities that have increased in value, you will pay tax on them when they are sold. But, as of May 2006, if you donate the securities to a registered charity you pay no tax and still receive a charitable receipt for the full market value of the securities.
Example:
The following scenario assumes both a tax rate of approximately 46.5% and that other charitable donations for the year exceed $200. The general annual limit on charitable donations is 75% of net income. Donation claims may be carried forward up to five years.
| TAX BENEFIT OF DONATING SECURITES |
Sell Securities & Donate Cash |
Donate Securities |
Fair Market Value of Donation
Typical Cost basis of securities
Capital Gain on security
|
$10,000
4,000
6,000 |
$10,000
4,000
6,000 |
| Taxable portion of capital gain |
(50% ? $6000) $3000 |
$0 |
Tax payable on capital gain (cost)
(assumes a combined tax rate of approx
46.5%) |
$1,395 |
$0 |
Value of Charitable Donations Credit
(assumes combined credit is 46.5%
46.5% ? 10,000) |
$4,650 |
$4,650 |
Net tax savings
Tax credit
Tax payable on gain
NET TAX SAVINGS |
$4,650
- 1,395
$3,255 |
$4,650
0
$4,650 |
| Donation Receipt |
$10,000 |
$10,000 |
To be eligible for this tax exemption, the securities must be:
- Publicly traded on a stock exchange approved by Canada Revenue Agency
- Appreciated in value
- Donated/in-kind (not sold before donation) to a registered charity.
If you would like to make a gift of publicly listed securities to Saint Mary's University,
please seek professional guidance from your legal and financial advisors.
To download a share transfer form, please click here (opened with Adobe Acrobat Reader).
For more information,
please contact Saint Mary's University Development Office at 902-420-5495 or by email.
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