Armstrong Family
Armstrong Family at their home overlooking the Beaver valley
(left to right) Kylie, Dianne, Duncan, John and Chloe

Investing in the Bruce Trail Conservancy

Since the Federal budget changes in 2006, many BTC donors have been taking advantage of the elimination of the capital gains tax on gifts such as publicly listed securities and mutual funds. Long-time BTC donors Dianne and John Armstrong have found that gifting shares has been more cost effective for their family than simply giving cash, although they have done both .

Dianne explains: "Gifting shares has enabled us to donate more to the BTC. We had shares with high capital gains we wanted to sell anyway, and gifting the shares enabled us to save money on the tax we would have otherwise paid to Revenue Canada. We'd rather see our funds going directly to a cause like buying land or conserving the environment. "

"It is really easy to donate stock!", Dianne adds. "It only took an email to our investment counselor and a head's up to the BTC and its broker that the shares were coming.  We wanted to give a dollar amount, so we just estimated how many shares we should sell based on the current trading price of the shares that day. The transaction happened in one day and was totally behind the scenes for us.  We simply received notification from our investment counselor that the securities had been donated and from the BTC a couple of days later that they had received the shares. Our tax receipt was issued within a few weeks- the same as it would have been if it were a cash donation."

Dianne and her family know that donations to the BTC can provide a legacy and sense of permanency.  Recently, a plaque honoring their strong support was installed by the BTC on a bridge near their family chalet in the Collingwood area. Dianne is happy to note that: "Now when our children hike that part of the Trail, they see that plaque and are reminded that we all have a duty to give back and help conserve the environment--especially the Niagara Escarpment."

Donating stocks to the BTC can result in incredible tax benefits for donors. For example, let's assume you have publicly listed securities, such as stocks, bonds or mutual funds, which cost $2,000 and have increased in value to $10,000 since you acquired them. When you make a gift of these securities directly to the BTC you will receive a charitable tax receipt based on the fair market value of the securities on the day the BTC receives your gift ($10,000). In addition, you will not have to pay any tax on capital gains earned off this stock. The chart shows the tax benefits for an Ontario resident at the top marginal tax rate.

EXAMPLE

Sell Shares & Donate Cash

Donate Shares Directly

( a ) Amount of Gift

$10,000

$10,000

( b ) Purchase Cost of Shares

$2,000

$2,000

( c ) Capital Gain

$8,000

$8,000

( d ) Taxable Capital Gain (50% X $8,000)

$4,000

$0

( e ) Tax Credit on Donation (at 46% X $10,000)

$4,600

$4,600

( f ) Tax on Capital Gain (at 46% X $4,000)

$1,840

$0

 

 

 

( e ) - ( f )  Net Tax Savings

$2,760

$4,600

As with any other charitable donation, the amount of your charitable tax receipt (up to 75% of your net income) is eligible for a non-refundable tax credit  to offset taxes otherwise payable. Donations in excess of the 75% limit may be carried forward and used in any of the five subsequent years. Donation planning should be done in consultation with your financial or tax advisor.