Tax Benefit for gifts of publicly traded securities
When donating an appreciated security to LUTW you will save the tax, and receive a tax receipt for the entire amount. If you donate 1,000 shares to LUTW, that are now worth $1.00. You receive a $1,000 tax receipt, offering approximately 40-45% (depending on province and income levels) in taxable benefit to you. If you paid $.20 per share, you save the capital gains tax that you would have owed through a personal sale of the shares, this is an additional saving to you by making this gift, in addition to the benefit offered through the tax receipt, or approximately $.16-.20 per share.
The Added Benefit of Flow Through Shares
The tax break is simple: For every dollar of flow through shares bought, you save $0.40 of tax for the flow-thru deduction immediately (based on your taxable income). When you donate the share to charity, you get a tax credit of about 40% of the market value of the shares at the time of donation. So, if the stock stays flat the total tax saved is up to $0.80 for every dollar donated! If it goes up to $1.50 then the tax saved is $1.00 or more for every dollar donated, essentially a no cost contribution!
We encourage you to contact your tax advisor to achieve maximum impact for your charitable gift.
Capital Gains Tax Removed
There is great news regarding gifts of shares proposed by the federal government in the last budget. As a Canadian donor to Light Up The World, you may consider the benefits of a donation of shares in a publicly traded company. Effective May 2, 2006, gifting securities to a registered charitable organization are no longer subject to capital gains tax, and a donation of publicly traded securities provides donors with a significant tax savings.
1. Gifts of publicly-traded securities to Light Up The World can be made as a direct transfer of securities from your account to our brokerage account, or you may simply deliver your endorsed stock certificate to Light Up the World.
2. Gifts of publicly-traded securities are eligible for a tax receipt for the fair market value of the gift as assessed at close of the market on the date of transfer or delivery.
3. It is our general policy to sell gifted shares as quickly as possible, without disturbing the market. Proceeds of the sale equal to the value at donation will be transferred to your chosen program or project.
For details on options for donation please contact:
Tara Collins, Director of Fund Development