Using publicly-listed securities (stock, mutual funds, bonds) to make your donation can be more advantageous from a tax perspective than using cash. Normally, if you sell securities and donate the cash 50% of the capital gain is added to your taxable income. This means that while you receive a tax credit for the charitable gift you will pay income tax on the gain. There is no tax paid on the capital gain if the securities are transferred directly to the charity, making this type of gift more tax efficient.
Use the following calculator to see an example of the benefit of using securities to make your gift, rather than selling the securities and donating the cash. Please note that this calculator is not meant to replace professional advice and is for illustration purposes only.
Assumptions:
- You will make additional charitable donations in the calendar year of at least $200.00
- Provincial tax rates vary. Calculator will default to the highest marginal tax rate for the province you select. You may insert a rate in the third field that more closely reflects your own marginal tax rate.