A donation of securities or mutual fund shares is the most efficient way to give charitably. With a donation of securities or mutual funds, capital gains tax does not apply, allowing you to give more and avoid paying capital gains taxes.
But hurry, the deadline for a 2018 securities tax receipt is December 17th, 2018.*
By partnering with Canada Helps, we make it easy to donate securities and mutual funds. Learn how it works:
Let’s say you purchased common shares in ABC Company for a cost of $1,000 and a few years later they now have a current market value of $5,000. You would have a capital gain of $4,000.
The chart below illustrates what happens if you sell the shares and then donate the after-tax proceeds and what happens if you donate the shares directly using CanadaHelps.
By donating shares directly, you get a larger tax credit and give more to the charity you care about.
*Please note, it typically takes 3–5 business days to sell and settle a trade from the date that we receive the securities or mutual fund from your broker or financial institution. If your security is not liquid (i.e. paper certificates) and they are not traded on a daily market, processing times are longer and can vary be security type. In such cases, CanadaHelps will contact you to share expected timelines.
1. This assumes a 46% marginal tax rate. For calculating capital gains tax, this rate is applied to 50% of the capital gain.
2. $4,080.00 represents the full value of $5,000.00 minus estimated tax of $920.00.
3. 3% fee applies to donations less than $10,000; 2.5% fee applies to donations between $10,000-$49,999; 2.25% fee applies to donations between $50,000-$99,999; 2% fee applies to donations $100,000+
These are general figures for the purpose of illustration. They do not constitute legal or financial advice. We strongly encourage you to seek professional legal and/or financial advice before deciding upon your donation to charity.