Stock Donation: A Tax-Efficient Way to Give to MacNab
If you sell publicly traded securities privately, you are taxed on 50% of the capital gains. However, if you donate the securities directly to charity, you pay no tax on the capital gains while also receiving a donation tax receipt for the full market value of the securities. This means that the gifting of securities which have appreciated in value, may be a much more tax efficient way to give to MacNab than selling the securities and then donating the proceeds.
Example: You wish to donate $50,000.
| Sells Shares Donates Proceeds | Donates Shares Directly to MacNab | |
|---|---|---|
| Values of the shares & donation receipt | $50,000 | $50,000 |
| Original purchase price of shares | $20,000 | $20,000 |
| Capital gain | $30,000 | $30,000 |
| Taxable gain (line 3 x 50%) | $15,000 | $0 |
| Donation tax credit (calculated at 46%) | $23,000 | $23,000 |
| Tax on capital gain (line 4 x 46%) | $6,900 | $0 |
| Net tax savings (line 5 minus line 6) | $16,100 | $23,000 |
| Cost to make gift (line 1 minus line 7) | $33,900 | $27,000 |
For more information contact Kevin Russell who will be happy to discuss this important way of donating to MacNab. **MacNab and Mr. Russell, however, cannot and will not provide financial advice.
The MacNab Gift of Publicly Traded Securities form should be used in discussions with your broker or with a transfer agent in order to have the proper information available about to whom the stock should be transferred.
You may also wish to visit the Presbyterian Church of Canada website for more information on Publicly Traded Securities.