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Facilitate gifts of appreciated securities

A direct transfer of stock or mutual funds to charity saves income tax. Great news! As per the May 2, 2006 Federal Budget, effective immediately, you include none of the capital gain in your income if the stock is given directly to Link Charity. You still receive the same charitable receipt for the full market value.

Link can especially help in the following situations:

1. Your charity does not have a brokerage account. Ask Link Charity to do the transaction.
2. You have one stock but want two or more charities to benefit. Make one transfer to Link Charity (a charity, of course) and give a letter of direction with details. Link will sell your stock and make donations to the charities of your choice.
3. You have a stock but want to achieve a certain sale price (be realistic). You transfer the stock to Link Charity with a trust condition that it be sold at a specific price.
4. You see an opportunity in the market to sell but you are uncertain which charities should be the recipients; Link will sell, keep the proceeds invested, and distribute when you are ready.

Link Charity has brokerage accounts open with 8 brokerage firms.

Download and complete the stock transfer form. Call, fax or write Link (see the top of the page) to obtain the appropriate brokerage name and account number for Link.

Download (51KB) (This form is a PDF. Acrobat Reader is freely downloadable.)

Distribution of Proceeds Letter of Direction Download (6.5 KB)

Link Charity would appreciate permission to charge $25 for the transfer and liquidation work and first charity cheque and $10 for each additional charity cheque it would issue at the same time.

Example 1: BCE (Bell Canada). If you've owned Bell Canada shares for a long time, much of the original capital cost was transferred to the Nortel shares in the May 2000 share distribution. Today, at a range of $40.00 to $42.75, many people's cost is less than $10; this is an excellent stock to give to charity for the capital gains privilege.

Example 2: Flow-through limited partnership shares at conversion to mutual fund units have a zero capital cost. The full value is 100% capital gain. It's a superb gifting item. If the initial investment has neither gained nor lost, the calculation is that the donor will have personally contributed about $80 out of a $1,000 gift and the two levels of government have given the other $920 through the three steps of the flow-through, exemption of capital gain, and the charitable tax credit.

Have some share certificates just mouldering under your bed or in a safety deposit box? Turn them into resources that your favourite charities could put to use improving people's lives.

Shareholder?

Are you a shareholder? Ever consider donating shares or mutual funds?

1. Maybe you have inherited shares many years ago and have NO idea of the cost base. You have feared disposing of them because finding the cost and reporting the gain would be a nightmare. Fear no more. With a zero inclusion, the gain is immaterial. No need to research it.
2. Did you buy shares on an employee payroll plan, or on a re-invested dividend plan, and have lost track of the cost base? Worry about how to calculate it? Concerned about the mess it might make in your estate settlement? All of these things fall by the wayside if you donate these shares to charity. The zero inclusion means the cost doesn't matter. You just receive a tax creditable charitable receipt for the full market value.
3. Thought about donating shares, but the large capital gain and what you thought would be a huge tax bill, has deterred you? Especially oil stocks, resource income trusts, have huge gains. No matter. The new tax measure introduced May 2 is that you include NONE of the gain in your income, but still receive a full charitable receipt (which is worth about $44 of tax refund for every $100 of shares).

See the earlier part of this page for further information, or telephone us for clarification and advice: Harry at 1-800-387-8146.