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A gift of stock is an investment in the best health care possible at St. Michael’s. You can donate a gift of stock during your lifetime or through a bequest. For further details and benefits, you can read on below and download the donation form for gifts of stock to print. If you have any questions, you may contact Cynthia Collantes at 416-864-5879 or collantesc@smh.ca.
Your best tax advantage for a gift of stock is a direct donation, as the federal government has eliminated the capital gains tax payable on the appreciated value. You or your estate will receive a tax credit to lower the income tax payable.
You can also donate the cash proceeds from the sale of publicly traded stocks, but you’ll have to pay tax on any capital gains so your net tax savings won’t be as high.
Here’s an example.
Let’s say you bought 100 shares valued at $40 each in a publicly traded company several years ago. Today, your initial investment of $4,000 has grown to a value of $10,000. You’ve decided to donate your shares to St. Michael’s Foundation.
The tax benefits for your donation options are as follows:
| Gift of Stock to St. Michael’s Foundation |
Donate stocks directly |
Sell stocks and donate cash |
| Current Fair Market Value |
$10,000 |
$10,000 |
Adjusted cost base (amount paid
for securities) |
$4,000 |
$4,000 |
| Capital Gain |
$6,000 |
$6,000 |
|
Taxable Gain at 50%
|
$0 |
$3,000 |
| Marginal Tax Rate in Ontario |
0% |
46.41% |
| Tax on gain at Marginal Rate |
$0 |
$1,392 |
| Charitable Tax Receipt for Gift |
$10,000 |
$10,000 |
| Tax Credit at the Marginal Rate |
$4,641 |
$4,641 |
| Net Tax Savings |
$4,641 |
$3,249 |
| Total Tax Savings |
$6,033 |
$3,249 |
| |
Tax credit of $4,641 plus $1,392 in tax on gain not paid |
Tax credit of $4,641 less $1,392 tax paid on gain |
The value of your donated stocks can be any amount. Your lawyer, accountant or financial planner can advise what method of giving will be the most tax effective for you.
For more information, please contact Cynthia Collantes at 416-864-5879 or collantesc@smh.ca. Your inquiry and any information exchanged will be held in strictest confidence.
Thank you.
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