Gift of Securities: An Illustrative Example

Mrs. Smith would like to donate $50,000 to Little Flower Academy. Mrs. Smith owns publicly listed shares worth $50,000, which she originally purchased for $10,000. What are the tax advantages for giving the gift as securities rather than selling the asset and giving LFA the same gift as cash?
The example below compares the possible tax savings for Mrs. Smith. It is a comparison of a donation of $50,000 in securities to LFA against the proceeds from simply selling the shares to make your donation or donating cash:

Sell your securities
and donate the proceeds
Donate your
securities in-kind
Purchase price of securities$10,000$10,000
Present value of securities$50,000$50,000
Capital gain (FMV less cost)$40,000$40,000
Amount of your donation  $50,000$50,000
Subtract your charitable tax credit($21,850)($21,850)
Add tax on the capital gain$8,740$0
After tax cost of your donation$36,890$28,150
Marginal Tax Rate: 43.7% / Tax Credit: 43.7%
The above illustration assumes that Mrs. Smith has made other charitable donations exceeding $200; is resident of British Columbia; has a combined marginal tax rate of approximately 43.7%; and, has donated eligible publicly traded securities.

We recommend you discuss your gift intentions with your financial, legal or tax advisor.

Making a gift of securities is easy. Simply have your broker fill out the GIFT OF SECURITIES form and email it to Karen Teufel at in our Advancement Office.

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