Appreciated Securities, Mutual Funds

If you own publicly traded securities that have increased in value since you purchased them, using them to make your charitable donations is the most tax effective way to give. If you sell the securities you will pay tax on 50% of the capital gain. If you donate the securities in-kind, you will pay no tax on the capital gain, and you will receive a charitable receipt for the market value of the securities on the day you initiate the transfer to Heritage.

What is a Publicly Traded Security?

A publicly traded security is a stock or bond that trades on a stock exchange recognized by Canada Revenue Agency (CRA). Mutual Funds do not trade on stock exchanges, but are also considered publicly traded securities.

What does In-Kind Mean?

This means that you do not sell the security and transfer cash to Heritage, but rather your securities are transferred to Heritage Baptist College & Theological Seminary’s brokerage account and then our broker will sell them. If you sell them first, you will pay tax on 50% of the capital gain.

Which securities should I donate for maximum tax savings?

You can only donate securities that are held in a non-registered investment account. Investments held in a registered account (RRSP or RRIF) do not qualify for these tax savings.

Capital gains on investments held in a tax free savings account are already exempt, do donating these investments will not generate the same tax savings as donating securities held in a taxable investment account.

Always consider donating the stocks, bonds or mutual funds with the greatest capital gain because this will save you the most tax.