A gift of publicly listed securities (including stocks, bonds and mutual funds) makes an excellent gift to The Nature Trust of BC and will help us expand our existing conservation portfolio.
Donations of publicly listed securities directly to charitable organizations receive the charitable donations tax credit. In addition to this, such donations to public charities are 100% exempt from capital gains.
Why is a gift of securities good for donors?
When you sell your shares, you’re responsible for the tax due on the gain, even if you plan to donate the proceeds from the sale. If you pay the tax out of those proceeds, there’s less money left to donate. The Nature Trust of BC would receive a smaller donation and you would have a smaller donation to claim for your charitable tax credit at the end of the year.
But when you donate your securities directly to The Nature Trust of BC, those capital gains aren’t subject to tax. This means The Nature Trust would receive a larger gift, and you would benefit from a tax receipt for the full value of your eligible securities or mutual funds.
For instance, if you purchased common shares for a cost of $1,000 and the market value had increased to $5,000, you would have a capital gain of $4,000. If you sold those shares and donated the cash, you would owe tax on the capital gain. So, you would set aside the taxes due from the proceeds, leaving you with less than the full cash value to donate and a tax receipt which reflects the smaller donation.
But when you donate the shares directly to The Nature Trust of BC, you would owe no capital gains tax and you would be able to donate the full value. So The Nature Trust would get a larger donation and you would get a tax receipt which reflects your larger contribution. By donating shares directly, you can save on taxes while you’re offering more help to land conservation in BC.