Individuals can donate shares and halve any capital gains tax that would otherwise be associated with the selling of those shares.
For example, an individual holds shares in XYZ Corporation:
| Fair market value of shares |
$25,000 |
| Adjusted cost base |
$ 5,000 |
| Capital gain |
$20,000 |
| Taxable portion of gain (25% instead of 50%) |
$ 5,000 |
| Tax Payable (@ 43.7%) |
$ 2,185 |
Based on these figures, by donating shares rather than selling and donating proceeds, you can save $2,185 in tax payable on the capital gain. You will also receive a tax credit receipt for the full value of the donation ($25,000.)
Corporations with investment portfolios can also receive this benefit by choosing to donate shares in-kind.
For example, a corporation holds shares in XYZ Corporation:
| Fair market value of shares |
$25,000 |
| Adjusted cost base |
$ 5,000 |
| Capital Gain on sale |
$20,000 |
| Taxable portion of gain (25% instead of 50%) |
$ 5,000 |
| Tax Payable (@ 37.6%) |
$ 1,880 |
Based on these figures, by donating shares rather than selling and donating proceeds, your corporation can save $1,880 in tax payable on the capital gain. Your corporation will also receive a donation receipt for the full value of the donation ($25,000.)
If you would like to use stock to support the Britannia Project or the BC Museum of Mining efforts with the Mill Rehabilitation. Please contact:
Cindy Schoenhaar, Haywood Securities
604-697-7424 or cschoenhaar@haywood.com
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