Figure 2: Compares donating publicly traded shares directly vs selling the shares and donationg the cash proceeds. Be sure to consult your tax advisor and charity before making a gift of property. |
FIGURE 2 |
Marginal Tax Rate: 44% |
|
Sell shares and donate cash |
Donate shares directly |
FMV of doantion (a) |
$100,000 |
$100,000 |
Adjusted cost base |
$20,000 |
$20,000 |
Capital Gain |
$80,000 |
$80,000 |
Taxable capital gain |
$40,000 |
$- |
Tax on capital gain (b) |
$17,600 |
$- |
Donation tax credit (c) |
$44,000 |
$44,000 |
Tax Savings |
$26,400 |
$44,000 |
Total cost of donation = (a) + (b) – (c) |
$73,600 |
$56,000 |
Tax Savings by Donating Shares |
|
$17,600 |
|
|
|
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