Gifts of Stocks & Securities
Recent changes to Canadian tax law make it much more attractive to donate gifts of stocks, bonds, mutual funds, bills, futures and other publicly-traded securities to The Windsor Symphony Orchestra. Such a transfer is easily made electronically from your investment account to the WSO’s brokerage account. Also, owners of employee stock options may gift public charities of the proceeds of an exercise without incurring capital gains.
The elimination of capital gains tax on the donation of publicly-traded equities means that donors will increase their after-tax cash flow. It’s a win-win situation because gifts of securities “in kind” go a lot further to support the Windsor Symphony Orchestra than gifts of cash. With the new tax incentives, making a $40,000 gift of stock to the WSO could actually cost as little as $12,000.
The following example illustrates the benefits of donating stock to the Windsor Symphony Orchestra versus selling the stock and keeping the proceeds:
| Sell Stock & Keep Proceeds | Donate Stock to the WSO | |
|---|---|---|
Fair market value of stock |
$40,000 |
$40,000 |
Cost basis |
$8,000 |
$8,000 |
Donor's income |
$80,000 |
$80,000 |
Taxable capital gains realized |
$16,000 (50%) |
$0 |
Net annual income |
$96,000 |
$80,000 |
Total tax due (50% tax bracket) |
$48,000 |
$40,000 |
Amount of donation receipt |
n/a |
$40,000 |
Value of tax credit (50% tax credit) |
n/a |
$20,000 |
Tax due after value of tax credits |
$48,000 |
$20,000 |
Tax savings by making gift |
$0 |
$20,000 |
After-tax proceeds |
$72,000 |
$60,000 |
Cost to make $40,000 gift |
n/a |
$12,000 |
To discuss giving a gift of stock or securities, please contact Jenna Foley by email or by calling
519-973-1238 ext 16.