A gift of securities is a great way to support and encourage York’s dedication to innovation, student support, cutting edge research and enhanced infrastructure. Gifts of publicly traded appreciated securities, including stocks, bonds and mutual funds, made directly to York, may provide important tax advantages for donors.
A tax-smart way to give
A gift of appreciated publicly traded securities is a simple and tax-effective way of supporting York University. As of May 2006, if you donate certain publicly listed securities directly to York University you are not required to pay tax on the capital gains, while receiving a tax receipt for the current fair market value of the donated stock.
This tax break can substantially reduce the cost of your charitable donation and enable you to give more than you otherwise would imagine possible.
Types of gifts that qualify:
Publicly traded securities, including stocks, bonds, and units of mutual funds that are listed on the Canadian or U.S. stock exchanges.
Certain publicly listed flow-through shares, issued prior to March 22, 2011 may also qualify. Consult your accountant or tax professional for more information.
- Your shares must be transferred directly to York University. If the shares are sold and then the proceeds are donated to York University, the enhanced tax benefits do not apply.
- For valuation purposes, you will receive a charitable tax receipt for the full, fair market value of the shares, valued at the closing price on the day the securities are transferred to York University.
- You may choose how your gift of securities is used by York. For example: student aid, a particular academic program, or the area of greatest need.
- If your donation exceeds the amount eligible for a tax credit in the year your gift is made, the excess credit may be carried forward up to five years.
- If you give authority to your estate executor to leave securities to York University through your Will, your estate will receive the tax benefits.
A gift of stocks or securities should bring you great satisfaction since it directly supports York University and helps shape the global thinkers and thinking that will define tomorrow.
Charitable giving example
This example illustrates the tax advantages associated with donating appreciated securities directly to York as opposed to selling the securities and donating the proceeds.
|Sell Shares and Donate Cash||Donate Shares Directly to York University|
|Fair Market Value (A)||$40,000||$40,000|
|Adjusted Cost Base||$20,000||$20,000|
|Taxable Capital Gain (50%)||$10,000||$0|
|Charitable Tax Credit on Donation (46%) (B)||$18,400||$18,400|
|Tax due on Capital Gain (46%) (C)||$4,600||$0|
|Tax Receipt for Gift||$40,000||$40,000|
|After Tax Cost of Gift (A-B+C)||$26,200||$21,600|
|Net Tax Savings to the Donor||$4,600|
The after tax cost to you is about 54 cents on the dollar.
*Example assumes a 46% tax rate.
How to make a gift of publicly traded securities to York University
To learn the easy steps involved in transferring your securities to York University, click here for instructions. Next, contact us to obtain the security Transfer Form that you and your broker will need to initiate the transfer.
If your securities are held in certificate form, please contact Marisa Barlas, senior development officer, gift planning at firstname.lastname@example.org for specific instructions on transferring your stock to York University.
To obtain the security Transfer Form and detailed transfer instructions, or if you have any questions regarding gifts of securities, please contact:
Senior Development Officer, Gift Planning
Tel: (416) 650-8221
Fax: (416) 650-8220
Director, Donor Programs
Tel: (416) 736-2100, ext. 33642
Cell: (647) 455-5742
Fax: (416) 650-8220
Why does Earle Nestmann give stock to York?
“I give to York because it’s a gift that keeps on giving. Donating stock is no strain on my budget, because the money is already invested and not part of my cash flow. If I redeem the stock personally, any gains in value are subject to tax. But donating the stock directly to York solves the tax problem. This makes a lot of sense to me. The staff at York is knowledgeable and helps make the transfers easy to accomplish. I heartily recommend it.”
This information is general in nature and does not constitute legal, financial or professional advice. If you are considering a gift of stocks or other securities, we strongly encourage you to seek professional financial and tax advice to see if this giving option is right for you.