Donating Appreciated Shares – Public and Private Shares and Securities (including mutual funds)
A common misconception about planned or legacy giving is that you benefit only in the future. In fact, you can often benefit immediately.
50 per cent of a capital gain from the sale of stock is taxable. When a stock is donated to a registered charity, the full capital gain is exempt and no tax is owed. The exemption can be applied to income tax returns up to five years after the gift has been made, as with any charitable contribution.
Gift of securities and mutual funds
How It Works
Donating a gift of securities, stocks and bonds, is simple and can have great tax-saving advantages for you while making a real difference to the charitable work of the Canadian Medical Foundation.
Gifts eligible for this preferred tax treatment can be funded with a variety of securities:
- Prescribed bonds;
- Units of mutual funds; and
- Shares, warrants, bills and futures that are listed on the stock exchanges prescribed by the Canada Revenue Agency (CRA).
Great Tax Advantages for You
A 2006 tax provision made by Canada Revenue Agency (CRA) gives donors who contribute appreciated stock and bonds the chance to eliminate the amount of capital gains tax otherwise payable to the government. Now, none of the gain (the amount by which the current fair market value exceeds the average cost base) will have to be considered as income. Selling those same securities would result in a capital gains tax calculated on 50% of the realized gain, creating a much higher tax bill payable to the government in that year.
The Charitable Donation Offsets Taxes Due
When you make an outright gift of appreciated securities, be it stocks or bonds, you will receive an official charitable tax receipt for the fair market value of the gift. This is based on the value of the securities at the close of trading on the date of ownership transfer to the Canadian Medical Foundation. This tax receipt provides a non-refundable tax credit that offsets income tax due on other income.
How To Make a Gift of Securities
It’s easy and straightforward. Have your broker transfer your shares electronically to the Canadian Medical Foundation.
- Please fill out the Share Transfer form: Gift of Securities
Or
- If you hold the shares, send them by Registered Mail or Courier or hand-deliver the certificate that has been endorsed by you. Your signature must be guaranteed. Do not assign the certificate to the Canadian Medical Foundation.
If you register mail, courier or hand-deliver unendorsed shares, also mail, courier or hand deliver an *endorsed Power of Attorney (in a separate envelope when mailing it). Your signature must be guaranteed. Do not assign the certificate to the Canadian Medical Foundation.
You may also obtain blank powers from your broker. Please be sure to sign the power exactly as your name appears on the certificate or bond.
*Your signature must be guaranteed by a Commissioner for Taking Oaths or a Notary Public or a bank or trust officer. A Barrister & Solicitor has this power.
Mail, courier or hand deliver to:
The Canadian Medical Foundation
720 Bathurst St. Toronto, ON, M5S 2R4
Please enclose a letter stating the purpose of your gift.
How to Make a Gift of Mutual Funds
If you hold mutual funds in an account with a major brokerage firm, or they are held in connection with a mutual fund broker/dealer, you may have your mutual funds transferred to the Canadian Medical Foundation.
The fund company may require you to sign a fund company disclaimer. Contact your broker/dealer to obtain the required form for your signature.
*Your signature must be guaranteed by a Commissioner for Taking Oaths or a Notary Public or a bank or trust officer. A Barrister & Solicitor has this power.
Valuation of Your Gift
Valuation of your gift is based on the closing price of the share on the day that the Canadian Medical Foundation or our broker receives the securities and/or mutual funds. If there is no closing price on that day, the closing price on the last preceding day for which there was a closing price will determine the value of the securities for charitable tax receipting purposes.
