How gifts of securities work 

Gifts of securities include privately or publicly held shares, bonds mutual funds and stock options.

When gifting shares directly, you receive a charitable tax receipt for the fair market value on the day the shares are received by Waterloo (valued at average of high/ low trading price of the day)

AND - you are exempt from capital gains on such gifts.

If however, you sell the shares yourself and donate the proceeds, 50 per cent of the taxable gain must be included as income/stock options.

Example

                                       Personally sell securities for cash. Donate after-tax proceeds. Donate securities directly to the University of Waterloo
Original cost of securities $10,000 $10,000
Current market value $50,000 $50,000
Capital gain $40,000 $40,000
Tax on capital gains $9,2001 $0
Donation amount after tax $40,800 $50,000
Your charitable tax receipt $18,7681 $23,0002

We can help

To make a gift of securities, you may initiate an electronic transfer from your broker to Waterloo’s broker using our:

Letter of Direction for a Gift of Securities

For more information, please contact:

Andrea Carthew
Associate Director, Advancement
School of Optometry & Vision Science
University of Waterloo
59-888-4567, ext. 36319
acarthew@uwaterloo.ca

 

1This assumes a 46% marginal tax rate. For calculating capital gains tax, this rate is applied to 50% of the capital gain.

2These are general figures for the purpose of illustration. They do not constitute legal or financial advice. We strongly encourage you to seek professional legal and/or financial advice.