Appreciated Securities, Mutual Funds
Giving Through Appreciated Securities and Mutual Funds
A Smart and Highly Tax Effective Way to Support Heritage
If you own publicly traded securities or mutual funds that have increased in value, donating them directly can be one of the most tax efficient ways to give. When you sell these investments, half of the capital gain becomes taxable. When you donate them in kind, you do not pay any tax on that gain, and you receive a charitable tax receipt for the full market value of the investment on the day you begin the transfer to Heritage.
This allows you to give more, reduce taxes, and make a meaningful impact on the training of future ministry leaders.
What Are Publicly Traded Securities
Publicly traded securities include stocks or bonds that are bought and sold on a stock exchange recognized by the Canada Revenue Agency. Mutual funds, even though they do not trade on a stock exchange, are also considered publicly traded securities for charitable giving purposes.
What Does In Kind Mean
Giving a security in kind means that you do not sell the investment yourself. Instead, the security is transferred directly from your investment account into the brokerage account of Heritage Baptist College and Theological Seminary. Once the transfer is complete, our broker sells the security.
This direct transfer is important because if you sell the investment first, you will be responsible for tax on half of the capital gain. When you donate in kind, that tax is eliminated.
Which Securities Provide the Greatest Tax Benefit
Only securities held in a non registered investment account qualify for these tax advantages.
Investments held in RRSPs or RRIFs do not qualify, and withdrawals from those accounts are taxed as income.
Investments held in a Tax Free Savings Account already grow tax free, so donating them will not provide the same tax benefit as donating securities held in a taxable account.
For maximum tax savings, it is often best to donate the stocks, bonds or mutual funds with the highest capital gains. This allows you to eliminate more taxable growth while making a significant charitable gift.
Contact Us
We would be glad to walk you through the process.
For more information, please feel free to contact our Donor Development department.
The information provided on this page is for general educational purposes only and is not intended as legal, financial or tax advice. Each individual’s situation is unique, and laws and regulations may change over time. We strongly encourage you to consult with your accountant, tax adviser or legal professional before making any financial or estate planning decisions.