While caring for her ailing father, Lorna experienced first-hand the gaps that exist within seniors' health care, particularly for patients with dementia.
Securities & stock options
Donating appreciated securities is simple, cost-effective and the most tax-efficient way to make a charitable gift.
You can make a charitable gift of securities by using any one of the following types: prescribed bonds, units of mutual funds, exchange traded funds (ETFs), shares, warrants and futures that are listed on the stock exchanges prescribed by Canada Revenue Agency.
Click here to download a securities form.
Benefits to you
- Capital gains income on securities that have been donated to charity are non-taxable - the entire donation amount results in a tax credit
- Straightforward and easy to transfer: your broker can usually execute a transfer in one or two days
- Your charitable tax receipt is equal to the mid-point trading value or closing value of your securities, whichever is higher, on the date the securities are received by SFU
- The proceeds from your securities are directed to the area of your interest
- You can deduct the entire gift in the current year or carry taxes credits forward for up to five years
Illustration of cash vs. stock
Donations involving employee stock options in a public company can be one of the most tax efficient ways to make a donation.
Normally, when stock options are exercised for personal gain, the difference between the stock's fair market value and its exercise price is considered a taxable employment benefit. This benefit is then taxed as a capital gain, such that 50% of the profit is counted as income; employers must withhold the required taxes on that amount, including EI and CPP.
However, charitable gifts arranged by donating stock options can result in a high value gift at low cost.
Benefits to you
- Reduced cost of giving
- Simple transaction
- Maximized tax benefits
Illustration of tax savings
You have received stock options from your employer, a publicly traded company, which allows you to buy 1,000 shares of company stock for $3 per share, for a total cost of $3,000*. The shares are currently trading at $8 per share (for a total of $8,000), such that the options have a capital gain of $5,000. You donate the proceeds of sale to SFU.