Donating Securities to Parkinson Canada—a Tax Efficient Way to Give!

Sue Rosenblat
Parkinson Canada

Each year at this time, many Canadians look at all the requests from charities and then decide which ones they want to support before December 31.

Since 2006, Canadians have been able to donate securities to registered Canadian charities and receive a tax receipt for the full appreciated value with no capital gains tax. This has proven to be one of the most effective ways you can support organizations such as Parkinson Canada.

If you donate your securities to Parkinson Canada, the capital gains are not subject to tax. This means Parkinson Canada receives funding that can be used towards Parkinson research, education programs, advocacy and support groups in communities like yours, and you will benefit from a tax receipt for the fair market value of your securities on the date of transfer into your brokerage account.

Below is an example of the benefits of donating securities.

Consider a donor in the 46 per cent tax bracket (assuming a provincial tax rate of 17 per cent) who has already donated $200 this year to a charity (the first $200 of charitable donations allocates tax credits at a lower rate). Assume she donates securities worth $5,000, which is the current value of the shares, with an adjusted cost base of $1,000.

Sell Securities and Donate the Cash Donate Securities Directly
Current Market Value of Securities $5,000 $5,000
Adjusted Cost Base (securities original cost) $1,000 $1,000
Capital Gains ($5,000—$1,000) $4,000 $4,000
Estimated tax on Capital Gains @ 46% marginal tax rate applied to 50% of the capital gain $920 paid out in taxes $0
Donation Amount After-Tax $4,080 $5,000
Chart Source: Your Guide to Charitable Giving & Estate Planning
*This amount represents the full value of $5,000 minus estimated tax of $920. Processing and brokerage fees have not been deducted.

If you are thinking about making a gift of securities to Parkinson Canada, we encourage you to seek independent professional advice from a tax specialist or your financial advisor. You can download our Guidelines for Transferring Assets and the Letter of Authorization from Donor to Broker here.

To explore the benefits of this type of giving, please contact Sue Rosenblat at 1-800-565-3000 ext. 3386, or PlannedGiving@parkinson.ca.

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