A tax-efficient way to donate to Parkinson Canada is by donating appreciated public company shares that you may own in a non-registered investment account. When you donate shares, you do not pay any tax on the appreciation within the shares, and you receive a donation receipt for the full value of the shares at the time of your donation.
The tax benefits of this donation strategy are twofold
- If you decide to sell the appreciated public company shares in order to donate cash to Parkinson Canada, you will have to pay capital gains tax on the sale of the public company shares, and will have less cash to donate to Parkinson Canada. However, if you donate appreciated public company shares to Parkinson Canada, the capital gains tax is eliminated, and the full value of the public company shares can be received by Parkinson Canada.
- Parkinson Canada will issue you a donation receipt equal to the full value of the public company shares at the date of the gift. As you will not have capital gains tax from this gift, you can use the tax credit from this gift against your other income.
To donate appreciated public company shares to Parkinson Canada, simply ask your investment advisor to transfer (in-kind) the appreciated public company shares from your investment account to Parkinson Canada’s investment account: parkinson.ca/transfer-assets
Here’s an example:
A donor is considering making a gift to Parkinson Canada. They are considering if they should donate cash or if they should donate shares from their personal non-registered investment account. The shares have a value of $5,000 and were originally purchased for $2,000.
| If the donor sells the stock and makes a cash gift, the following will result: | If the donor gifts the stock to fund the donation, the following will result: | |
|---|---|---|
| Capital gain from stock sale: | $3,000 | $nil |
| Tax on capital gain (25%): | $750 | $nil |
| Donation receipt amount: | $5,000 (cash received from stock sale) | $5,000 (value from stock donation) |
| Donation tax credit (50%): | $2,500 | $2,500 |
| The total tax benefit of this donation is $2,500 (donation tax credit) less $750 (tax on capital gain) = $1,750 | The total tax benefit of this donation is $2,500 (donation tax credit) less $nil (tax on capital gain) = $2,500 |
Learn more about different ways to give to Parkinson Canada
By Alexandra (Ali) Spinner, CPA, CA, TEP
Partner at Crowe Soberman LLP