Publicly Listed Securities
This method of planned giving, which provides an immediate source of income to the Church, is advantageous to you because transfers of listed securities to a registered charity will: (a) give you a tax receipt for the full market value of the stocks you donate; and (b) exempt you from tax on the capital gains realized on the disposal of the securities.
When a taxpayer sells publicly traded securities and then donates the proceeds to the Church, he or she pays income tax on the capital gain realized on the sale of the security. While the donor receives a donation receipt for the amount of the gift, the income tax on the realized capital gain can be as high as 46% on one-half (the taxable portion) of the gain.
By contrast, capital gain is free of income tax when the listed security is donated. By gifting the security itself rather than using cash from the proceeds of the sale, the donor can realize a significant tax reduction.
If you are considering making a cash donation, and you have securities with an unrealized capital gain, then consider donating the security instead. You could donate the number of shares that equal the value of the cash donation you wish to make, thus saving capital gains tax. See chart on page 3 for a comparison of a Cash vs Publicly Listed Securities donation.
Prior to making a cash donation, you may wish to consider the donation of shares, a debt obligation, a right listed on a prescribed stock exchange, a share of a mutual fund trust, or a prescribed debt obligation where the fair market value of the security is higher than the cost.
In order to initiate a transfer of securities, please complete the Gift of Publicly Traded Securities Form and forward to the Diocesan Finance Office, Diocese of Victoria, 1 – 4044 Nelthorpe Street, Victoria, BC, V8X 2A1.
Prior to making a donation or gift, we recommend that donors seek independent professional advice concerning the possible financial, taxation and legal consequences.