Gift of Securities

Life Insurance

Donating securities, such as publicly listed stocks, bonds or mutual funds to charity, is an excellent alternative to making a cash donation.

This type of donation is called a gift in kind, which means it is a non-cash donation. The amount of the charitable tax receipt is based on the market value of the securities the day the charity receives the fund.

Benefits
When you sell stocks that have appreciated in value, 50% of the capital gains must be reported as income. Donating those same securities to Shine Through The Rain Foundation reduces the capital gains to zero. You will also receive a charitable tax receipt for the full market value. In order to eliminate the capital gains, the shares must be transferred directly to Shine Through The Rain Foundation.

How to Donate Your Securities
You can choose to donate your securities to Shine Through The Rain Foundation’s general operating fund or you may choose to designate your gift to support one of our projects. The process of transferring ownership of securities to the Foundation is simple. Your financial advisor completes a form and sends it to Shine Through The Rain Foundation’s offices. For copies of the form and more detailed information on the benefits of donating securities, contact Shine Through The Rain Foundation offices.

Selling Shares versus Donating Shares
The 2006 federal budget eliminated the capital gains tax on donations of publicly listed securities. This is good news for our communities and the people who support the work of Shine Through The Rain Foundation.

In the illustration below, assume you have invested $1,000 in Acme shares. Those shares are now worth $5,000. If you donate those shares to Shine Through The Rain Foundation you will receive an income tax receipt for $5,000. Compare this with the tax consequences of selling the shares and donating the proceeds versus simply donating the shares to Shine Through The Rain Foundation.

Sell your securities and donate cash to The Foundation Donate your securities in-kind to The Foundation
Fair market value of securities $5,000 $5,000
Cost of securities $1,000 $1,000
Capital gains realized $4,000 $4,000
Taxable capital gain $2,000 (50%) $0
Taxes payable (assume 46%) $920 $0
Tax credit* (assume Ontario resident)*Donation tax credits may be carried forward for the next five years. $2,300 $2,300
Net Tax Reduction $1,380 $2,300*

*Assumptions:

  • You have given at least $200 in charitable donations in the same tax year.
  • Provincial tax rates vary. So please choose the tax rate the more closely reflects your own personal tax situation.
  • You have eligible publicly-traded securities to donate which may include shares, bonds, bills, warrants, futures and units in mutual funds that are traded on Canadian, American and/or major international exchanges

Note: For more information about charitable tax credits, please visit the Canada Revenue Agency web site at www.cra-arc.gc.ca.

The information provided above is for illustration purposes only. Please consult your financial and/or legal advisor for tax-effective giving that is most suitable for you.

For more information, please contact:

Major Gifts & Planned Giving
Shine Through The Rain Foundation
1211 Gorham Street, Unit 12, Newmarket, ON L3Y 8Y3
Phone: (905) 477-7743 Fax: (905) 477-4251
Email: info@shinethroughtherain.ca

Federal Registered Charity, ID number 891881005RR0001

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