Making a gift of shares is one of the easiest and most tax-effective ways of donating. It’s what we like to call getting a bigger bang for your buck.
The deadline for 2024 is December 18.
By donating shares directly to The Montreal Children’s Hospital Foundation, you will not only help transform care for sick children, but you will also profit from significant tax benefits because you are eligible for two tax savings:
- Donation tax credit.
- Elimination of all or a portion of the capital gain taxes, depending on your financial situation.
There is a wide variety of publicly-traded securities that qualify and donating is simple and straightforward.
The following example shows the results from:
- Donating the proceeds (cash gift) from the sale of shares (Scenario A)
- versus - - Donating shares directly (Scenario B)
*For simplicity and illustration purposes, we will use 50% as marginal tax and tax credit rates for donations through this example. Actual results may vary depending on your marginal tax bracket.
These are general figures and do not constitute legal or financial advice. Please consult your tax advisor.
Important information: The scenarios above compare tax advantages assuming you benefit from the complete elimination of taxes on capital gains.
Procedure and Forms
Frequently Asked Questions
To ensure a smooth process, please follow these steps:
1 - Complete the Gift of Shares Form with your broker.
2 - Before transferring the securities to the Montreal Children’s Hospital Foundation account, please provide a copy of this form to both:
- The Montreal Children’s Hospital Foundation
Samar El Soufi at sels@mchf.com
Phone : 514-934-4846 Extension 29226
- Scotia Wealth Management
Richard Meloche at richard.meloche@scotiawealth.com
Setareh Ghaffari at setareh.ghaffari@scotiawealth.com
Phone: 514-904-6681
3 - Your broker may then proceed with the transfer of securities to the Children’s Foundation.
Receiving Institution: ScotiaMcLeod
Account Name: The Montreal Children’s Hospital Foundation
Account Number: 425-90992-18
CUID: SCOT
DTC: 5011 (For US Securities)
The best time to donate depends on your readiness to contribute. If you would like to receive a tax receipt for the current calendar year, we recommend making your donation by early December. Please keep in mind that while most donations of securities are typically transferred to the Foundation’s account within 3 to 5 business days, some may take up to four weeks.
You can donate a variety of securities, including publicly traded securities, mutual fund shares, bonds and mining flow-through shares.
By donating securities directly to the Foundation, you may receive the following benefits:
1 - A tax deduction for the fair market value of the shares at the time of the donation.
2 - The opportunity to avoid paying capital gains tax on any appreciation.
3 - For gifts made by a corporation, the ability to create capital dividend account for the complete amount of the gain not taxed. Dividends paid to shareholders out of the capital dividend account are received tax-free, so this is a real benefit for many.
N.B. if you choose to sell your securities and donate the proceeds to the Foundation, you will be required to pay capital gains tax on the total gain. Additionally, please be aware that the alternative tax minimum may reduce the overall benefits you receive from your donation, especially if your reported income exceeds $173,000 per year.
N.B. You should review and confirm the tax benefits of the securities gift with your professional advisor(s).
Yes, a charitable tax receipt will be issued for the fair market value of the securities, determined by the closing price on the date of transfer to the Children’s Foundation.
You can donate securities during your lifetime or from your Will. This approach can help reduce the capital gains taxes your estate may otherwise owe. Additionally, by donating securities, you can benefit from charitable tax deductions, allowing your estate to provide more for your chosen beneficiaries.
Yes. You can specify how you would like the donation to be used, whether for a specific program or for general support. We encourage you to share your preferences when you notify us about your gift of securities.
The AMT is a separate tax calculation that allows for fewer deductions and benefits, as well as fewer exemptions, than regular tax rules. Taxpayers are required to pay either the AMT or the regular tax, depending on which amount is greater. Here are the proposed changes that may affect your gift:
- 30% of capital gains on donated securities will be added to AMT income
- Only 80% of the donation tax credit can be claimed when calculating the AMT
-These changes with other ones may result in an unforeseen AMT liability
We encourage you to discuss with your financial advisor or accountant whether these changes would have any impact on your giving, and what is the best strategy to lower this impact on your tax obligations.
For further information about donating securities to the Children’s Foundation, please contact Samar El Soufi at 514-934-4846 Extension 29226; Email: sels@mchf.com.