Donations to Canadian charities could rise by as much as $500-million annually because of a tax change announced in the recent federal budget.
The budget calls for the elimination of capital gains tax on donations of publicly traded securities to charities. Currently, if shares are donated, 25 per cent of any capital gain on the stock, after it has been sold by the charities, must be included in a donor's income. The change, which is effective immediately, means that no capital gain has to be included in income.
The stock donations still receive the same tax credits based on the value of the stock donated. In total, the measure will provide substantially more tax incentive for donations of securities than cash.
[Excerpt of article by Paul Waldie, The Globe and Mail (Toronto)]
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