Johnny, you bring to the Copper Ridge Conference (CRCC) project the benefit of a long career as an actuary and considerable experience in the insurance business. As such, you are very well placed to tell us about some of the donation methods CRCC donors might wish to take advantage of.
Sure. Yes, we are all probably familiar with the common ways we can financially assist the building and operation of Copper Ridge Conference Centre: funds donated as cash, by cheque, by a monthly withdrawal from your bank account, or by monthly donations via your credit card. But I suspect very few of us are familiar with stock donations.
Stock donations? That’s probably new to most of us. Could you explain this concept?
Yes. Donating shares is a very tax-efficient way of donating.
In most cases, when you sell stocks that have gone up in market price since you bought them, the difference (that is, the money you make on them) results in what is called a capital gain.
Now, this capital gain may be used to offset any capital losses you incur in the sale of other stocks; the ones that actually lost value!
Generally, 50% of the net capital gain on your stocks is deemed taxable income.
So, if you have no capital losses to offset your capital gain, it would be beneficial (from an income-tax perspective) to donate the stocks rather than to sell them.
And, of course, the charity receiving your donation will benefit from your generosity too.
Yes, very much so.
As a donor you receive from the charity a tax receipt for the full market value of the stocks you donate.
In this way you will not be assessed a capital gain.
So, in other words, as a donor you won’t have to pay income tax on the difference between the present market value of stocks and what they originally cost you.
And you would be issued an income tax receipt for the full current value of the stocks.
I see. Okay, thanks Johnny. Next time we’ll talk about donating through a life insurance policy.