The May 2, 2006 federal budget presented donors and charities with a very big gift: the complete elimination of all capital gains tax on donations of publicly listed securities to public charities. If you own stocks or mutual funds that have grown in value, you will face a tax bill when you sell them. By donating them directly to the Canadian Hearing Services, you can reduce your tax bill and make a significant gift at the same time.
Benefits to you
- Opportunity to make a significant gift
- Receive a charitable tax receipt for the full value
- Pay no capital gains
- Securities are easy to transfer
- Recognition during your life time
Here's how it works
You purchase stock at $400. When it reaches $1,000, you donate the stock directly to the Canadian Hearing Services and receive a charitable tax receipt for $1,000. You pay no tax on the $600 capital gain. In addition, you will enjoy $460 in combined federal and provincial tax credits. In this example, compare the advantages of donating the stock directly versus liquidating the stock and donating the proceeds:
|Donating Stock Directly||Donating Cash From Sale Of Stock|
|Value Of Donation||$1,000||$1,000|
|Capital Gains Tax||$0||$140 (50% of $600 gain x 46% tax)|
The securities must be transferred directly to the Canadian Hearing Services and not first sold by you. If you first sell the shares, your gift will not qualify for the reduced capital gain.
How to Donate Securities
1. Complete the Letter of Instruction to Transfer Securities to Canadian Hearing Services.
2. Contact the fundraising department at firstname.lastname@example.org or 1-866-518-0000 ext. 4185
3. Upon completion of the transaction, a tax receipt for the amount of the donation will be sent to you.
Seek financial and legal advice
We strongly recommend you seek professional advice to ensure your financial goals are considered, your tax situation is reviewed, and your Planned Gift is tailored to your circumstances.