Gifts of Stock
Stock, Securities, Bonds, Mutual Funds and RRSP Gifts
Donating appreciated stocks, securities or mutual funds directly to Canadian Friends of Tel Aviv University is more cost effective than selling the stock and making a cash gift. There are many attractive tax incentives available to you with this program.
Thanks to changes in the Federal budget of May 2006, you no longer have to pay capital gains tax when you donate a gift of appreciated securities to Canadian Friends of Tel Aviv University. Individuals who sell appreciated stock are required to pay tax on 50 percent of the capital gain. However, if you donate the stock to charity, you pay no capital gains and receive a tax receipt for the full value of the stock. This makes donating appreciated stock one of the most effective ways to donate to CFTAU.
The following example illustrates the benefit of a gift of securities to make a charitable contribution vs. selling stock and donating the cash:
|Sell securities and donate cash||Gift securities transferred directly
|Fair market value of security (a)||$40,000||$40,000|
|Cost base (b)||$8,000||$8,000|
|Capital gain (c) (c=a-b)||$32,000||$32,000|
|Taxable capital gain (c @ 50%)||$16,000||0|
|Tax on capital gain at 46%||$7,360||0|
|Tax credit on donation (a @ 46%)||$18,400||$18,400|
|Net tax savings||$11,040||$18,400|
*The above assumes the gift was made in Ontario at a marginal tax rate of 46%
**The tax receipt would be based on the unit closing price on the day CFTAU receives the shares into our broker’s account
Note: Stock transfer forms sent by mail will delay the start of the transfer process and may affect the ultimate receipt value. Please notify Canadian Friends of Tel Aviv University by telephone at 416.787.9930 of your pending donation and ensure that a copy of the completed form is also forwarded to your broker/investment advisor who will be responsible for the transfer.
*If you are considering a donation like appreciated stock, securities or mutual funds, we encourage you to consult your own financial and legal advisors. They will ensure your donation is tailor made to your personal circumstances to maximize your tax advantage.