Charitable Securities

The Benefits of Donating Securities

Donating securities to the charity of your choice is not only philanthropic, but it’s also tax-efficient.

When you donate publicly traded securities (such as stocks or mutual funds) to a charitable organization, you support a good cause that you believe in, and you also unlock significant tax benefits.

Your charitable donation will give you a tax credit based on the fair market value of the donated securities. By donating shares directly, rather than selling them and donating the proceeds, you will avoid any potential capital gain taxes that you would have incurred; which ultimately leads to a win-win.

Do all donations create these savings?

Only securities donated to registered charities in Canada are eligible to issue official donation receipts for tax purposes.

What Securities are Qualified Donations?

• Shares, rights and debt obligations (bonds or debentures) that are listed on a designated stock exchange such as the Canadian Stock Exchange (CSE), Toronto Stock Exchange (TSX), TSX Venture Exchange (Tiers 1 and 2), and major foreign stock exchanges such as the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotations (NASDAQ)
• Mutual funds
• Interest in a segregated fund trust
• Bonds, debenture, note or mortgage of the Canadian federal or provincial governments

Are There Limitations in Donating?

There is no limit to how much you can donate within a year. You can only claim a charitable donation of up to 75% of your net income in a taxation year. The limit is also 100% of your net income in the year of death and the preceding year.

If you live in the province of Quebec, the limit is 100% of your net taxable income.

Which Securities Should I Donate?

There’s an art to selecting which securities to donate, as some may create a greater benefit to you than others.

Consulting with an Investment Advisor will help you make your philanthropic wishes align with an overall wealth plan.

Investments with a potentially large capital gain tax implication could seem like an obvious choice for gifting, however, donating securities with a large loss might create tax advantages as well.

Speak with your Investment Advisor and tax professional as your first step towards building your legacy.

Talk to a Caldwell Securities Investment Advisor today

Caldwell Securities Ltd. is member of the Canadian Investment Regulatory Organization (“CIRO”) and a member firm of the Canadian Investor Protection Fund (“CIPF”). Customers’ accounts are protected by the Canadian Investor Protection Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request or at www.cipf.ca.

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