Instead of selling your stocks, bonds or mutual funds and donating the proceeds, eliminate capital gains tax by donating them directly to Ross Creek/ Two Planks.
IMPORTANT NEWS FOR 2023 and the future!
From the Globe and Mail, OCTOBER 22, 2023
“Donate securities with new rules in mind. Investors who own publicly traded securities with accrued capital gains should consider donating these to a registered charity or foundation. Any taxes on capital gains will be eliminated, plus you’ll receive a donation tax credit for the gift. Also be aware that the new alternative minimum tax (AMT) rules come into effect on Jan. 1, 2024, which can reduce the tax savings when you donate securities to charity if you’re a high-income earner. So, donating securities in 2023 before the new rules apply could result in much greater tax savings.
Finally, if you have a corporation that earns income, consider transferring to your corporation (on a tax-deferred basis) the securities that you want to donate, then have the corporation make the donation. This will create a deduction for your corporation, and a capital dividend account which can be used to withdraw funds from your corporation tax-free and could result in greater tax savings overall. Speak to a tax pro about doing this.”
The Benefits: Save More, Give More
When you sell your shares for cash, you’re responsible for the tax due on the gain, even if you plan to donate the proceeds from the sale. If you pay the tax out of those proceeds, there’s less money left to donate. We receive a smaller donation and you have a smaller donation to claim for your charitable tax credit at the end of the year.
But when you donate your securities directly to us, those capital gains aren’t subject to tax. This means we receive a larger gift, and you’ll benefit from a tax receipt for the full value of your eligible securities or mutual funds.
Your gift of securities entitles you to a donation receipt for the full market value (resale) of your contribution. Your gift will result in a non-refundable tax credit that will reduce your income taxes. You can use it in the year of your gift or carry it forward for up to five additional years.
The chart below shows the tax advantage in 2023 when you donate shares to Ross Creek / Two Planks instead of selling them and donating the proceeds. This calculation assumes a tax rate of 50%.
3 EASY STEPS TO MAKE A STOCK DONATION
Please complete all sections of the securities transfer form . For privacy reasons, your broker cannot disclose your name to us, so please complete the Donor Information section, including your daytime phone number with area code. Your advisor/broker will provide the CUSIP # which acts like a transaction number in case the transfer needs to be tracked.
Please notify us at Ross Creek / Two Planks for processing. Email a copy of the completed transfer form to Ross Creek. This step is important because securities are transferred into our account without your name. We value every gift and want to provide you with an accurate tax receipt and appropriate recognition to honour your donation. Therefore, it is important for us to receive your name and address details.
Contact info: Ms. Jennifer Manuel, Director of Development
Ross Creek Centre for the Arts Box 190,
555 Ross Creek Road Canning, NS B0P 1H0
Ph: (902) 582-3842
Fax or send the completed transfer form to your broker or investment advisor. Your broker or investment advisor is responsible for initiating the transfer. Additional Information: Shares/stocks are considered legally transferred only when our custodial agent confirms delivery. Your receipt will be valued based on the closing price on the day when the shares are legally transferred to our account at RBC Direct Investing. Our policy for the sale of donated securities is to sell the shares as soon as possible after they have been received.
DONATING STOCKS THROUGH YOUR WILL
You can also donate stocks through your will and receive tax savings for your estate. For more information, or if you are the executor of someone else’s will and would like to distribute shares from the estate, please contact us.