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A CREATIVE METHOD TO MAKE CHARITABLE DONATIONS

by | Dec 28, 2022 | Financial Planning, Tax Planning | 0 comments

There are many methods you can use to creatively give to charity to reduce your tax bill and most effectively use your donation.

In this video, we’re discussing donating securities in-kind from your non-registered account. Watch this video to understand how these donations work and the tax advantages of this method.

There are multiple methods that we can choose to use to make donations creatively and to reduce your tax bill. Today we’re going to discuss donating securities in-kind from your non-registered account.

Donating securities in-kind allows you to make a donation in a dollar amount that you choose, and to do so directly from your non-registered account to your charity of choice.

When you decide that you would like to make this type of donation, you will receive a tax receipt for the full market value of any securities that you donate to your registered charity, and you bypass the requirement to pay capital gains tax on these securities, effectively double-dipping on your tax advantage. The CRA is fully amenable to this strategy as donors often make a bit of a larger donation to their charity of choice when donating in this matter.

If you would like to make a donation of securities, simply reach out to your financial planner. We will have a conversation to understand how much you would like to donate and then discuss this with your Portfolio Manager. They will determine the type of securities and will simply fill out a form for you to provide that information to your charity.

The charity will receive your securities directly, at which point they will sell those securities, providing you a receipt for the market value of those shares at the time of sale. Again, you receive the receipt for the market value and you do not need to pay capital gains tax on those securities that have appreciated.

This is a really effective way to make donations to a charity and cause that you support and can be another effective tool in your planned giving strategy.

If you have any questions or would like to discuss your planned giving with us, we’re more than happy to help. Please reach out to us.