As of November 2015, Canadian residents can make a donation of Canadian publicly traded securities to Hanne Howard Fund.
The Canadian income tax rules provide a significant tax advantage for persons donating Canadian publicly traded securities to Canadian charities.
Normally, if a security is sold for more than its cost, a capital gain accrues and leads to a capital gains tax. However, if the security is donated to a Canadian charity, capital gains tax does not apply. This can lead to a significant tax saving as compared to the donor selling the security and donating the proceeds to the charity.
Here is an example of potential tax savings, assuming a marginal tax rate of 46%. In this example, you would save an additional $690 in tax by donating securities to HHF. You can consult with your tax advisor to determine the exact amount of tax savings associated with the donation of specific securities.
| Sell Security and Donate Proceeds to HHF |
Donate Security to HHF |
|
| Donation Amount | $5000 | $5000 |
| Adjusted Cost Base | $2000 | $2000 |
| Capital Gain | $3000 | $3000 |
| Taxable Amount of Capital Gain – 50% | $1500 | N/A |
| Tax on Capital Gain @ 46% | $690 | 0 |
| Tax Benefit of Donation @ 46% | $2300 | $2300 |
| Less Capital Gains Tax | $690 | 0 |
| Net Tax Benefit | $1610 | $2300 |
Ready to make a donation of publicly traded securities in Canada? Download and complete our Stock Donation Request Form for your broker. This form gives your broker the authority to donate stock to HHF.
Please contact Alexandra Howard if you have any further questions or concerns regarding your transaction.
