Gift of Securities (In Kind)
Contact UsWhy a Gift of Securities vs Cash
Donating publicly traded securities – such as stocks, bonds, or mutual funds – can be one of the most tax-effective ways to make a charitable gift. When you sell securities that have increased in value, 50% of the capital gain is taxable. Even if you hold those securities until death, your estate must still pay capital gains tax on the appreciation.
However, when you donate publicly listed securities directly to a registered charity, the capital gains tax may be eliminated. This applies to gifts made during your lifetime or through your estate. In addition, you or your estate will receive a charitable tax receipt for the full market value of your securities donated, which you can use to offset other taxes.
The value of your donated securities can be any amount. For further details, review the example of the tax benefits, call us or simply click on our Securities Transfer Form (PDF) below
Example of the tax benefits for donating a gift of securities vs cash
Mr. Jones purchased publicly traded securities for $20,000. Today, they now have a fair market value of $100,000, creating an $80,000 capital gain. Mr. Jones decides to donate these securities to the Cancer Foundation of Saskatchewan to support the greatest needs of cancer patients in the province. He will receive the following tax savings by donating the publicly listed securities directly rather than selling them and donating the proceeds.
| Cash vs Shares | Sell Shares and Donate Cash |
Donate Shares Directly to CFS |
|---|---|---|
| Fair Market Value | $100,000 | $100,000 |
| Adjusted Cost Base | $20,000 | $20,000 |
| Capital Gain | $80,000 | $80,000 |
| Taxable Capital Gain | $40,000 | $0 |
| Tax due on Capital Gain @47.5% | $19,000 | $0 |
| Charitable Tax Receipt | $100,000 | $100,000 |
| Charitable Tax Credit @47.5% | $47,500 | $47,500 |
| Tax Savings @47.5% | $28,500 | $47,500 |
| Increased Tax Savings from Donating Securities | $19,000 |
Mr. Jones saved $19,000 by donating the shares directly to the Cancer Foundation of Saskatchewan and at the same time contributed $100,000 to support cancer patients and their care in the province.
By donating the securities directly instead of selling them and donating the cash, Mr. Jones tax savings are significantly greater, and he was able to make a larger impact on cancer care than he thought he could, for less net cost than expected.*
Please review with your investment advisor or accountant for assistance on what method of giving will be the most tax effective for you.
Contact Us: (306) 552-5665
Thank you for supporting cancer care in Saskatchewan.
*The above information is general in nature and is not intended as legal or tax advice. Let us help you support cancer care in Saskatchewan by working with your professional advisor to help ensure your wishes are carried out.