In Canada, there is currently no capital gains tax on donations of publicly listed securities. This means you receive a tax receipt for the full value of publicly traded shares donated, but you are NOT taxed on any gain. Your charitable receipt will reflect the closing price of the shares on the date they are received in our brokerage account.
The chart below shows the net tax benefit of donating shares in a publicly-listed corporation directly to a charity. This example assumes an original cost of $20,000 for the share, a marginal tax rate of 45 per cent and an eligible donation amount of $100,000.
|Action||Donor sells shares and donates the cash||Donor gives the shares directly to the charity|
|CURRENT FAIR MARKET VALUE OF SHARES||$100,000||$100,000|
|ORIGINAL PURCHASE PRICE (Cost basis)||$20,000||$20,000|
|TAXABLE GAIN (50%)||$40,000||$0|
|LESS TAX ON GAIN (at 45%)||($18,000)||($0)|
|TAX CREDIT ON DONATION||$45,000||$45,000|
For more information, download our Gift of Stocks or Securities information package, or contact:
President, George Brown College Foundation
416-415-5000 ext. 2747