Advantage of Making a Gift of Publicly Traded Securities                                                                                                                                                                               

Donating securities directly to Ambrose rather than the cash equivalent provides a tremendous tax advantage.

Net Cost of a Gift of Securities

Joe Smith contributes to Ambrose public stock having a fair market value of $10,000 and a cost base of $4,000.  His net income, excluding any capital gain on the stock, is $150,000 per year, and his other charitable gifts exceed $200.

Capital gain recognized                                                            $6,000

Taxable gain ($6,000 x 0%)                                                      $0

Tax on gain-assuming 45% rate ($0 x 45%)                             $0

Donation receipt                                                                       $10,000

Tax Credit -assuming credit is 45% ($10,000 x 45%)               $4,500

 

Net cost of gift                                                                          $5,500

Net cost of selling stock and gifting the sale proceeds

Suppose that Joe sold the stock and gave $10,000 of cash proceeds.

Capital gain recognized                                                            $6,000

Taxable gain (50% x $6,000)                                                    $3,000

Tax of gain (45% x $3,000)                                                       $1,350

Donation receipt                                                                       $10,000

Tax credit-assuming credit is 45% (45% x $10,000)                 $4,500

Net tax savings ($4,500 - $1,350)                                            $3,150

Net cost of gift ($10,000 - $3,150)                                           $6,850

Tax savings are $1,350 ($6,850 - $5,500) if Joe gives the stock instead of selling the stock and giving the cash proceeds.

 

Ambrose Donors Who Have Donating Securities

In the past twelve months over $550,000 worth of shares has been donated to Ambrose University College for the new campus project. These gifts are very helpful as we release cash to our general contractor to pay construction costs. The gifting of shares is an attractive option for those who wish to maximize tax savings when making a gift.

Robert and Maria Bailey from the Edmonton-area, Devon Alliance Church, have gifted shares to the school. Robert says, "The Lord has been good to us. We are glad to see young people from our church have the opportunity to hear the full truth in their education. I encourage others to support the school through the gifting of shares."

John Schroeder of Red Deer discovered that a gift of flow-through shares is an excellent way to make a donation with a significant tax savings. Basically every dollar donated comes at a net cost of only $0.20 to the donor. Donating flow-through shares means planning ahead but is worth the effort in terms of the amount of after-tax dollars that go to Ambrose University College.

John also points out the advantages of exercising stock options (within 30 days) as a good way to maximize a donation and minimize tax.

As donors consider ways to contribute to the new campus project a gift of publicly-listed securities might be a good option. By gifting shares directly to Ambrose University College, rather than selling them first and giving the cash as a donation, donors enhance tax saving by approximately 20% over a regular cash gift. A gift of shares can be an excellent way to minimize tax and maximize a gift to Ambrose University College.

To donate publicly-traded securities to Ambrose University College or for more specific information on the concept and transfer instructions, please contact Harry Huebner at 306.586.0325 (Regina home office) or hhuebner@ambrose.edu .