Charitable giving: Donation of public company shares
Have you ever considered donating publicly- traded
securities—such as stocks and bonds— to a charity? This
is a smart and tax-effective alternative to the donation of cash.
But how you structure your charitable donations can be as important
as the amounts you give—both for the charity and for you as
the donor.
The rules
The disposition of a share results in a capital gain to the
extent the fair market value of the share at the time of
disposition exceeds its original purchase price. However, there is
an exception to this rule where eligible property is donated to a
qualified donee such as a registered charity. Eligible property
includes securities, such as shares and bonds listed on a
prescribed stock exchange, as well as mutual fund units. For such
donations, the taxable portion of the gain is reduced to nil so
that the disposition of the security to the charity is fully exempt
from capital gains tax. This
