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Ask an Advisor - Previous Questions
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What are the limits on charitable deductions for an individual vs. their estate? |
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The maximum amount of charitable donations that may be claimed for credit in any one year is 75% of net income. Unused donations can be carried forward for up to five years beyond the year of the donation, subject to the 75% limit in each year claimed.
One of the reasons people plan differently for legacy gifts is that after you die, your estate can claim 100% in the year of death and the year immediately before death. This can be an important deduction if you have a second principal property, or a RRIF. Both of these situations can create a larger-than-normal tax liability upon death.
Answer provided by Nancy Griffin, CFP, Blackmont Capital |
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I usually send a cheque to my favourite charities, but I’ve seen a lot lately about gifts of stock and I happen to have a lot of investments. Is it difficult to give stock? What does the charity do with it, and how do I decide which is better for me? |
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Since the Federal government eliminated the capital gains tax on gifts of marketable securities in 2006, there’s been a lot of talk about giving appreciated securities. You’ve asked a number of questions, let me take them one by one:
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Is it difficult to give stock? |
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It’s probably more difficult to decide which charity to give to, than to actually give the stock! In fact, it’s just like buying or selling stock: just get the transfer information from the charity, then instruct your broker to transfer the stock electronically to the charity. One important note: make sure to tell the charity that the gift is coming, or they won’t know who to thank and issue the income tax return to! |
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What does the charity do with it? |
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Most charities will immediately sell the securities you give them, so they can put the revenue to work right away. |
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How do I decide which is better for me? |
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This is a question you might want to direct to your own financial advisor, because the answer is dependent upon many factors unique to your own situation. If you are planning to give anyway, and if you have appreciated securities and pay capital gains tax and/or income tax, it’s a good thing to explore the benefits of giving stock. |
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The Princess Margaret Hospital Foundation has more excellent information on their website: www.giftofstock.ca. There, you will also find out how to make a gift of stock to PMH.
Answer provided by Nancy Griffin, CFP, Blackmont Capital |
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PMH is one of the largest bone marrow transplant facilities in the world.
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