Donating publicly traded stock and securities is a tax-smart way to support the Red Door Family Shelter. By directly donating publicly traded stocks or securities that have appreciated in value you will receive a tax receipt for the full appreciated value, and will not be subject to any capital gains tax normally associated with a sale.
This tax break can substantially reduce the cost of your charitable donations and enable you to give more than you otherwise would imagine possible.
If your donation exceeds the amount eligible for a tax credit in the year your gift is made, the excess credit may be carried forward up to five years. If you leave securities to the Red Door Family Shelter through your Will, your estate will receive the same tax benefits.
Eligible securities include shares, debt obligations or rights listed on a prescribed stock exchange, a share of the capital stock of a mutual fund corporation, a unit of a mutual fund trust, an interest in a related segregated fund trust or a prescribed debt obligation.
The simplest way to make your gift of stock or securities is to have the shares electronically transferred from your account to the Red Door’s account. Red Door staff will help guide you through the process and provide any necessary information. The receipt value will be based on the closing trading price on the day the Red Door receives delivery of the shares.
Benefits of making gifts of stock and securities:
- Capital gains tax on publicly listed stocks and securities are exempt on gifts made as of May 2, 2006, when you donate your shares to the Red Door Family Shelter rather than selling and donating the proceeds (see example below).
Value of your tax receipt will be based on the market closing price on the day the Red Door takes legal receipt of your stock or securities into our brokerage account.
Susan decided to support the Red Door Family Shelter with a gift of $10,000. When reviewing whether she should sell her shares in a publicly-listed corporation and then donate the cash proceeds or donate the shares directly, Susan learned that she would have a greater net tax benefit by donating the shares directly to the Red Door. The chart below assumes a tax rate of 50 per cent.
|Sell Shares & Donate Cash Directly||Donate Shares|
|Fair Market Value||$10,000||$10,000|
|Tax Credit (at 50%)||$5,000||$5,000|
|Tax on Gain (at 50%)||$2,000||$0|
Please note: Your shares must be transferred directly to the Red Door Family Shelter. If the shares are sold and then the proceeds are donated to the Red Door, the enhanced tax benefits do not apply. The fair market value will be the closing price of the securities on the date the securities are transferred to the Red Door Family Shelter.
Click here to download our securities transfer form.