Benefaction’s top 10 charitable giving tips for Canadians
Canadians know that giving brings with it a tremendous sense of connection and fulfillment. Check out these tips to see how to get the most out of your charitable gifts.
1. Save tax by taking full advantage of tax planning opportunities.
Structure and time your gifts to limit any tax on the capital gain and obtain full benefit of the tax credits available to you.
2. Make gifts of securities instead of giving cash.
In addition to the tax credit, NO tax on any capital gain applies to gifts of publicly-traded securities given to charities.
3. Limit taxes for your estate by gifting your RRSP or RRIF.
Naming a charity as the beneficiary for your RRSP or RRIF usually eliminates the tax on this investment.
4. Executives should consider donating optioned stock.
Cash proceeds from optioned stock may be donated within 30 days of the exercise date. Like public securities, the donated portion will incur NO tax on the capital gain.
5. Make your gift go farther.
By designating a charity as the beneficiary of a life insurance policy, donors can bequeath many times more to their favorite charity.
6. Know your limits.
Up to 75% of net income (100% in the year of death) can be deducted annually. Any excess can be carried forward for the next five years.
7. Donate flow-through shares.
Despite the 2011 budget eliminating the capital gain component of the tax benefit that existed where a Canadian taxpayer buys a FT and then donates it to charity, taxpayers continue to benefit from the allocated FT resource deduction and the charitable donation tax credit. Subscription agreements prior to March 22nd 2011 are not affected, but charitable owners of FT’s should be aware of the impact this budget may have on their future donation plans and the possible time limit on being able to take advantage of the capital gain exemption of a FT share donation.
8. Save time by dealing with professionals who can manage your donations.
Benefaction can help to administer all your gifts from one place; and we can help make complex gifts easy for you to donate to your favorite charities.
9. Take control of your giving.
Enjoy benefits of having your own private foundation without the administrative costs and complications. Contact us for more information about a Benefaction Donor Advised Fund.
10. Create a legacy.
Many charities offer donors the ability to make gifts (and attach their names to them) so that others will know of their generosity for generations to come.Print PDF