Give a gift of stock, mutual funds or bonds- Canadian Red Cross

Give a gift of stock, mutual funds or bonds

Futures have always been a good investment

Gifts of Securities

In its 2006 budget, the Canadian federal government announced it eliminated capital gains tax on listed stocks donated to registered charities such as the Canadian Red Cross.

Listed securities include:

stocks
bonds
mutual funds
futures

traded on approved stock exchanges in Canada, and major international exchanges.

Message for BCE Shareholders»

If you would like to discuss the possibility of making a gift of securities to support the work of the Red Cross, please contact your local Red Cross Planned Giving Representative.

Tax benefits of donating securities:

Normally, when you sell securities, tax must be paid on 50% of any capital gain (the increase in value, since you acquired the securities). However, when you donate the same securities to a charitable organization, you will not pay tax on the capital gain. In fact, the combined benefit of paying no tax on the capital gain and the charitable tax receipt you receive on the entire amount provides excellent tax benefits when making your charitable gift.

When you donate securities, you will receive a charitable donation receipt for the fair market value of the securities, just as if your gift had been a cash donation. (The value will be based on the closing value of the security on the day that the stock is donated to the Canadian Red Cross). You will receive a charitable receipt for the entire amount of the gift, which you can then apply to your current taxes.

PLEASE NOTE: It is very important to remember that in order to derive the tax benefits, you must transfer the securities to the charity, not sell them first.

Example: Ted wants to donate $20,000 to the Canadian Red Cross. He currently owns stock shares that he purchased for $10,000. He is considering selling the stock, now worth $20,000.

Choices:

If Ted sells the stock for $20,000 and makes a cash donation of that amount, he must pay tax on 50% of the $10,000 capital gain. Assuming a tax rate of 48%, he will pay $2,400.
If instead of cash, he donates his stock shares worth $20,000 to the Canadian Red Cross, he will not have to pay tax on the capital gain thus making this a much more favourable option.

In either of the previous scenarios, Ted will receive a charitable donation receipt for $20,000 that can result in a tax credit of several thousand dollars.

An alternative way to make a gift of securities is to retain ownership of the investment, but assign the earnings from dividends and interest to the Canadian Red Cross.

Determining when and how to make a gift of securities and which securities to donate, will depend on your personal situation. The Canadian Red Cross recommends that you discuss your options with your financial planner and with your family.

If you would like to discuss the possibility of making a gift of securities to support the work of the Red Cross, please contact your local Red Cross office.

For more information, contact your local Legacy Representative.