Donations of Stock
Your donation of publicly traded stock and securities can be a tax-smart way to support the Kensington Foundation. You will receive a tax receipt for the full appreciated value of a donation of publicly traded stock or securities, and you are not subject to any capital gains tax.
To donate stock or securities, or if you have any questions, please contact Kathleen Roulston at 416-963-9640 x 2803 or firstname.lastname@example.org.
PLEASE NOTE: It is very important to remember that in order to derive the tax benefits, you must transfer the securities to the charity, not sell them first.
How do I actually save more and give more by donating gifts of securities?
Let’s say you purchased common shares in ‘X’ Company for a cost of $20,000. If the current market value of the shares has increased to $100,000, you would have a capital gain of $80,000. If you sell these shares and donate the cash, you would need to pay tax on the capital gain. Instead, by donating the shares directly, you get a tax receipt for the $100,000 and pay zero capital gains tax. As a result, you now have a tax credit of $46,000, which is $18,400 more than would you have had if you had sold the shares and donated the proceeds. Thus, this method of giving is more tax-efficient.
|Sell Shares and Donate Cash|
|( a ) Fair Market Value||$100,000|
|( b ) Adjusted Cost Basis||$20,000|
|( c ) Capital Gain||$80,000|
|( d ) Taxable Capital Gain (50%)||$40,000|
|( e ) Tax Credit on Donation (at 46%)||$46,000|
|( f ) Tax on Capital Gain (at 46%)||$18,400|
|( e ) - ( f ) Net Tax Savings||$27,600|
*The illustration provided above is general in nature and does not constitute legal or financial advice and should not be relied upon as a substitute for professional advice. We strongly encourage you to seek professional legal, and financial advice before deciding upon your donations to the Kensington Foundation.
How long does it take for my donation to reach the Kensington Foundation’s Brokerage Account?
That depends. Generally, most securities take a few days to get to Kensington once you’ve submitted the Letter of Authorization to your financial advisor. Some securities however, can take a few weeks (e.g., mutual funds).
How and when do I get my tax receipt?
You will receive your tax receipt by mail after your donation has been received. PLEASE NOTE: according to Canada Revenue Agency (CRA) guidelines, the value of your donation for tax receipt purposes will be determined by the closing value of the shares donated on the day that your donation is received into our account.