Looking to sell some marketable securities and make a donation? You can kill two birds with one stone by donating the marketable securities directly to your charity of choice instead, and save some tax while you're at it.
For gifts of marketable securities made in 2007 the capital gains inclusion rate is 0 per cent. Meanwhile, the charitable donation credit is still based on the full fair market value of the gifted securities.
To be eligible for the reduced capital gains inclusion rate, the securities must generally be shares, debt obligations, or rights listed on a designated stock exchange, or units of mutual fund trusts or mutual fund corporations as defined in the Income Tax Act.
Gifts to a private foundation may also qualify if the gift is made on or after March 19, 2007.
Finally, similar rules apply to the deferred stock option benefits realized on donations of marketable securities acquired pursuant to an employee stock option plan.
Thinking of donating marketable securities? Consult a Chartered Accountant to determine whether your securities will qualify for the reduced capital gains inclusion rate.
Information for Tax Tips is provided as a public service by the Chartered Accountants of British Columbia.