Giving News

CANADIAN CHARITABLE DONATIONS

Source: BMO

Canadians contribute more than $8 billion annually to their favourite charities - no small sum. And there have never been more distinct ways to donate than there are right now. Although we generally make charitable donations for philanthropic reasons, there are many income tax incentives provided for charitable gifts. For individuals looking for tax effective donation alternatives to the traditional gift of cash, recent federal budget changes have made a gift in-kind of investment securities very appealing. In particular, the tax on a capital gain realized on the donation of certain publicly traded securities to a qualified charity can now be eliminated.

In addition to the elimination of the capital gains tax, you will receive a tax credit for the full value of the donation. Donating publicly traded securities, such as shares, bonds and mutual funds, not only helps the charities involved but translates into valuable income tax savings for you. It's a win-win proposition! Other ways to support charities include:

  • Leaving a sum of money or publicly traded securities to a charity in your will;
  • Establishing a donor-advised fund;
  • Establishing a charitable remainder trust; or
  • Establishing a charitable remainder trust; or
  • Naming a charity as beneficiary on your life insurance policy.

 

These are just a few of the more complex charitable giving strategies available to you, and each one has unique advantages. Depending on how the gift is structured, you can reduce your annual income tax bill or help your estate offset capital gains taxes in the future. Your individual circumstances will determine which one is right for you.

 

 

Sponsored in part by BMO
BMOIs a registered trade-mark of Bank of Montreal, used under licence. ® “Nesbitt Burns” is a registered trade-mark of BMO Nesbitt Burns Corporation Limited, used under licence. BMO Nesbitt Burns Inc. and BMO Nesbitt Burns Ltée are indirect subsidiaries of Bank of Montreal. If you are already a client of BMO Nesbitt Burns, please contact your Investment Advisor for more information.CPIF