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Cash vs. Donating Shares

Donating Cash vs Donating Shares
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