RBC Donation of Securities
Help Us Help Our YouthCharitable Donations of Securities
Gifting shares instead of cash could enhance your tax benefit
To encourage individuals to increase their charitable giving, there is a tax incentive for individuals who wish to donate publicly traded securities. These securities include shares, debt obligations or rights listed on a designated stock exchange, mutual funds, interest in related segregated funds and Government of Canada or provincial government bonds donated to charitable organizations, public or private foundations (hereinafter referred to as “charity”). The capital gains triggered upon the disposition of these donated securities is eliminated, resulting in lower income taxes.
Benefits of donating securities with capital gains
Combining the elimination of the capital gain when donating securities and the donation tax credit
When you donate a publicly listed security with accrued capital gains, you benefit from the elimination of the capital gain plus the donation tax credit. The combined tax savings can be quite impressive. The following example illustrates this point by comparing two alternatives for donating securities, assuming a FMV of $50,000, an adjusted cost base (ACB) of $10,000, and a tax rate of 46%.
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