Tax Effective Method of Donating Stock


Tax Effective Method of Donating Stock

Paul Morton, CPA, CA, CFP, TEP, Tax Partner (retired)

If you are planning to make a significant donation to a Canadian registered charity in 2017, you might want to consider stocks. Donating stocks can be a tax efficient way to make a contribution, provided that you keep the following considerations in mind.

To qualify for special tax treatment, the investment must be a publicly traded security. The most common publicly traded securities are shares, debt obligations, and mutual funds that are listed on designated stock exchanges in Canada and internationally. Donations must be made to registered charities or other approved donees, the most common of which are public and private foundations.

The tax treatment can be illustrated using the following example.

You can either:

The tax consequences are shown in the table below.


In summary, by donating the shares, the donor saves $4,200 in tax, while the charity is ahead by $9,200 — a win for both parties!

Other tax considerations include the following.


Always speak with your accountant when planning how to meet your philanthropic goals. A slight adjustment can save significant taxes for you, and provide more funds to the charity you want to support.


Read our recent articles

For your business and personal finances.


Planning for Death and Taxes – Incorporating Your Investments

As personal and corporate tax rates have fluctuated in recent years, incorporating investments has become… Read more


Maximizing Legacy: Combining Estate Planning with the Donation of Shares in a Private Corporation

For successful business owners, donating shares in their private corporation to a registered charity can… Read more


KPIs for Growing Businesses

It is important to establish metrics that are inter-connected and to understand how each impacts… Read more


Let’s Connect

Reach out today to discover the
opportunities behind your numbers

Contact Us