Eligible donations that may be used for tax purposes in a year cannot exceed 75% of your net income plus 25% of the taxable capital gains arising from donations of capital property. If the amount of the donation exceeds your deduction capacities for that year, unused amounts can be carried forward and used in any of the five subsequent tax years.

 

Upon death, the maximum deduction against net income increases to 100% of net income in the year of death. As well, the tax return for the year preceding death may be reopened to treat donations on this return as eligible for an income tax credit to the extent of 100% of net income. Due to this provision, donating shares as part of one’s Will merits consideration as there will be benefits from both the income tax credit and the reduced capital gains inclusion rate.

 

Don’t miss this opportunity to support our patients and caregivers while saving taxes! Your gift to the Cedars Cancer Foundation will last for generations.
 

Income tax from the exercise of stock options can be reduced in a similar way if the shares or their value are donated.
 

Why donate by way of public shares from your portfolio?

• To benefit from a tax measure that will save you 50% on your taxes.
• To realize, at a lower cost, the accumulated capital gain on shares held for a number of years.
• To help a cause that you feel strongly about supporting.

	Sale and donation	Direct donation
Market value of shares	$100,000	$100,000
Cost of shares	$40,000	$40,000
Capital gain ($11,00 - $1,000)	$60,000	$60,000
Taxable capital gain	$30,000	$0
Taxes payable (assuming a 48,2% marginal rate)	$15,000	$0
Charitable donation tax credit (48,2% federal and provincial)	$50,000	$50,000
Net tax savings	$35,000	$50,000
Net cost of donation	$65,000	$50,000