Tax Benefits of Giving

The practical advantages and tax benefits of a Donor-Advised Giving Program:

Maximizing Your Tax Credits

• Immediate tax credit of up to 75% of net income. (100% in the year of and year before death)
• No capital gains taxes on gifts of appreciated securities.

Using the Tax Credit from your donation to a Donor-Advised Giving Program

Example: Rachel Fine has an annual income of $95,000. She donates $50,000 to a Donor-Advised Giving Program.

Donation = $50,000

Tax Credits:
(Federal & Provincial) = $22,500 ($50,000 x 45%)*
Total Cost of Gift = $27,500 ($50,000 – $22,500)

The tax credit can be used to reduce Rachel’s taxes in the year of the donation by $22,500**

*Assumes a combined Federal and Provincial tax credit rates of 45% as an example.
**Donation can be carried forward up to five years.

Eliminate your capital gains tax by donating your appreciated securities (publicly listed stocks, bonds and mutual funds).

Example: Rachel Fine holds a Bank Stock with a fair market value of $100,000 and wants to make a $100,000 donation to charity.

Sell Bank Stock & Donate Cash VS. Donate Bank Stock

Market Value = $100,000 VS. $100,000
ACB = ($40,000) VS. ($40,000)
Capital Gain = $60,000 VS. $60,000
Taxable Gain (50% vs. 0%) = $30,000 VS. $0
Tax on Capital Gain (at 45%) (A) = ($13,500) VS. ($0)
Tax Benefit of Gift (at 45%) (B) = $45,000 VS. $45,000
Net Tax Benefit (A + B) = $31,500 VS. $45,000

Net Savings from Donating Bank Stock = $13,500

Working together, we can build a better world! A Donor-Advised Giving Program is designed to help you give – in your own way. Feel free to get in touch for more information on a Donor-Advised Giving Program.

 

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