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megram - Index

megram - 55Ottawa - Index

Column 1 Column 2
Cash Donation “In-Kind” Donation
Fair Market Value of Donation $10,000 $10,000
Adjusted Cost Base ($2,000) ($2,000)
Capital Gain $8,000 $8,000
Taxable Gain $4,000 $2,000
Tax Payable (A) (46.4%) ($1,856) $0
Tax Benefit (B) (46.4%) $4,640 $4,640
Net Tax Benefit (A+B) $2,784 $4,640
Savings from In-Kind Donation N/A $1,856
For example, let’s say you own
mutual funds with a fair market value
of $10,000. You bought them for
$2,000 (see chart) and are considering
donating them to charity.
If you sold the mutual funds and
donated cash, you’d realize a capital
gain of $8,000 and pay tax of about
$1,856, assuming a top marginal tax
rate of about 46.4 per cent. Your net
benefit — including the value of the
donation credit minus the tax on the
capital gain — would total about
$2,784 (see column 1). In-kind donations
eliminate the capital gains tax you
would otherwise pay. Since you’d still
be entitled to your full tax receipt for
the $10,000 you contributed, your net
benefit would be $4,640 (column 2).
Gifting flow-through shares
If you invest $10,000 in flowthrough
shares you’ll save about $4,640
in taxes (assuming a marginal tax rate of
46.4 per cent). If you donate the shares
to charity after two or three years and
they’re are still worth $10,000, you’ll
pay no tax on the capital gain (the gain
results from your adjusted cost base
being zero).You will also be entitled to
a donation tax credit for the $10,000
value of the shares, saving you approximately
$4,640 in tax. So you paid
$10,000 for the shares, you received
$4,640 back in tax savings from the
deduction, and $4,640 from the donation
tax credit, leaving you with a net
out-of-pocket cost of just $720! So a
$10,000 donation to charity cost you
only $720.How’s that for a big win-win?
Giving through insurance
Gifting an insurance policy that’s
been set up by a competent profes-
If not now...
When will it matter most?
GIVE A GIFT THAT WILL CHANGE LIVES.
IT MAY BE THE MOST IMPORTANT GIFT YOU EVER MAKE.
As one of Canada’s leading hospitals,
Sunnybrook is inventing the future of
health care today – by providing
world-class patient care, pioneering
new discoveries, and nurturing
tomorrow’s medical leaders. We need
your support to deliver our best.
Treating the gravely ill, the seriously
injured or those at highest risk
means we must respond quickly and
compassionately. Lives are at stake,
and every moment counts.
September 2008 • 49 • Fifty-Five Plus Magazine
And every gift counts at Sunnybrook.
Including us in your estate planning
ensures that your commitment to
Sunnybrook continues. The promise
of your gift today enables us to plan
better for tomorrow.
Talk to your family. Talk to your
advisor. Talk to us.
You can be sure whatever you
give will help save lives, when it
matters most.
Telephone: 1-866-696-2008 ext. 5877
Email: sandra.scian@sunnybrook.ca
Website: www.sunnybrookfoundation.ca
Charitable Business Number: 899 209 118 RR0001