Types of Charitable Gifts

Many people don’t realize donating to charity can take other forms than simply giving a lump sum or monthly contributions.

Publicly Listed Securities – stocks, bonds, mutual fund units, employee stock option shares; Benefits to donor - no capital gains tax. See gift at work today

Life Insurance Policy – whole life or term policy naming charity as owner or irrevocable beneficiary; Donor gets receipt for cash value and future premiums paid – a small current outlay leveraged into a larger future gift.

Interest-free Loan – Provides charity with capital for building or investing. Donor can recover principal, interest not taxable to donor

Bequest of Retirement Plan Accumulations – RRSPs /RRIFs – Donor provides a possible future gift while preserving personal security, receipt offsets tax on distribution of retirement funds.

Bequest by Will – cash securities, real estate, tangible personal property; Donor can give a future gift while retaining full control of property, receives donation receipt with final income tax return; No capital gain tax for listed securities - for other property, 50% of capital gain will be taxable but can be offset by tax credit from charity.

Shares in a Privately Owned Corporation - shares may pay dividends, charity can sell or hold shares; Donor is receipted for appraised market value at time of gift, issued immediately if gift is to a public charity. If gift is made to a public foundation, the donor is receipted when foundation sells the shares.

Real Estate – principle residence, vacation properties, or investment properties; Donors receipted for fair market value, 50% of gain is taxable unless property is donor’s primary residence, then no taxable capital gain. Tax offset by tax credit from charity.

Tangible Property – artwork, furniture, equipment, collections, automobiles, musical instruments, artifacts, certified historic structures; Donor is receipted for fair market value, 50% of gain is taxable but offset by tax credit from donation.

Charitable Remainder Trust – cash, securities and real estate; Donor receives net income from property for life or a term of years; may be receipted for present value of the remainder interest issued at time trust is established; Property is not subject to probate.

Residual Interest in Real Estate or Artwork – principle residence, other real estate, artwork; Donor is able to continue using property for life or term of years, can receive a receipt for present value of residual interest issued at time of gift. Donor avoids tax on a portion of capital gain if they retain life interest. Property is not subject to probate

Annuity (self-insured or reinsured – cash or marketable securities; Charity receives whatever principal remains after making required payments or that portion of the contribution that is retained after purchasing commercial annuity; Donor is guaranteed life payments, all or substantially tax-free, can be receipted for a portion of contribution.

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Comments

Showing 1 to 2 of 2 comments.

Big help, big help. And supertlaive news of course.

Posted by Loradae | July 19, 2011 Report Violation

My sister-in-law is downsizing to a one room residence but is having difficulty finding an organization to which to donate her furniture (all usable, but not new). She lives in White Rock and is moving to Vancouver Island to be near family. She would appreciate any suggestions that would not require moving the furniture to the Island. Thank-you

Posted by Rosemary Backman | May 17, 2010 Report Violation

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