Tax Information
Text
Illustration of Gift Scenarios
Assumption:
- All donors are in the highest tax bracket; and
- All pledges can be made over a 3 or 5 year period
| CASH DONATIONS | |||
| Gift Amount | Donation Receipt | Tax Credit at 48.25% | Cost of Gift |
| $30,000 | $30,000 | $14,475 | $15,525 |
| $40,000 | $40,000 | $19,300 | $20,700 |
| $50,000 | $50,000 | $24,125 | $25,875 |
For persons (individuals and corporations) who are considering a gift to the LCLC, if they are holding publicly listed securities, with capital gains, there is a tax savings by gifting these securities rather than gifting cash.
The tax on the capital gain, which is payable on an eventual disposition of the securities, is eliminated if the securities are transferred to a charity. The following is an illustration.
| SECURITIES DONATION | |||
| Market Value of Securities | Adjusted Cost Base | Capital Gain | Potential Tax (48.25%) |
| 30,000 | 10,000 | 20,000 | 4,825 |
| 40,000 | 10,000 | 30,000 | 7,235 |
| 50,000 | 10,000 | 40,000 | 9,650 |
So if you give appreciated securities with a market value of $30,000 on an adjusted cost base of $10,000 with $20,000 in capital gain, you will receive a tax credit of $14,475 and a tax saving of $4,825 on the capital gain, for a total of $19,300. Your gift costs you $10,700.
This is an illustration only. Tax planning around charitable giving can be complex. Please obtain professional advice from your tax adviser
