Donating Securities

 

In 2006, the Federal Government changed the income tax law to allow donation of publicly traded securities to charities such as the OK Clean Water Project without having to pay the capital gains tax of the securities.  This new rule can benefit better both the charity and the donor.  Below is an example of the increased benefits.

 

 

Sell securities and donate after-tax cash

Donate securities

 

Selling Price

$10,000

$10,000

 

 

 

Purchase Price (Adjusted Cost Base)

$2,000

$2,000

 

 

 

Capital Gain

$8,000

$8,000

 

 

 

Taxable Capital Gain (50% of Capital Gain)

$4,000

$0

 

 

 

Marginal Tax Rate

45%

45%

 

 

 

Capital Gain Tax Payable

$1,800

$0

 

 

 

Net Amount Donated to Charity (Selling Price minus Capital Gains Tax)

$8,200

$10,000

 

 

 

Federal Tax Credit

$2,350

$2,872

 

 

 

Provincial Tax Credit

$905

$1,106

 

 

 

Total Tax Credit

$3,255

$3,978

 

 

 

Additional Tax Credit

 

$723

 

 

In this example, the donation of securities gives the charity more money ($1,800) and the donor more tax credit ($723).

 

The OK Clean Water Project now has the facility to accept donations of securities. 

 

If you wish to make a donation of securities, please contact info@okcleanwaterproject.org.