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:
Kelsey Gagnon:
Associate Director, Advancement
School of Optometry & Vision Science
University of Waterloo
Phone: 519-502-3131
Email: kelsey.gagnon@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.