​

Gifting Securities

​

Donating appreciated investments to Universal Outreach Foundation may be one of the most tax-efficient ways to support our work. If you own publicly traded securities that have increased in value, donating them directly may allow you to make a meaningful gift, receive an official donation receipt and avoid the capital-gains tax that might otherwise arise from selling the investment.

 

Why Donate Securities?

When you sell an appreciated investment, part of the capital gain may be taxable. But when eligible publicly traded securities are transferred directly to Universal Outreach Foundation, the accrued capital gain may qualify for a zero inclusion rate. You may also receive an official donation receipt based on the fair market value of the securities when the gift is received. Together, these benefits may make donating securities more tax-efficient than selling the investment and donating the cash proceeds.

 

Transfer the Investment—Don’t Sell It First

How the gift is completed matters.

To qualify for the special capital-gains treatment, eligible securities generally need to be transferred directly to Universal Outreach Foundation. If you sell the investment first and then donate the proceeds, the sale may create a taxable capital gain.

Please contact us before initiating a transfer. We can provide the information needed by your financial institution and help ensure your gift is identified correctly.

​​​

What Types of Investments May Qualify?

Eligible investments may include:

• Shares listed on a designated stock exchange

• Units of mutual fund trusts

• Shares of mutual fund corporations

• Interests in certain segregated funds

• Certain listed bonds and other prescribed debt obligations

The rules vary by investment, so please speak with your financial or tax adviser before making a transfer.

 

An Illustrative Example

Imagine that you purchased shares for $4,000 and they are now worth $10,000.

If you sell the shares, you may have to report the $6,000 capital gain before donating the cash. If you transfer eligible shares directly to Universal Outreach Foundation, the capital gain may qualify for a zero inclusion rate, while you may still receive a donation receipt for the shares’ $10,000 fair market value. This means the same investment could potentially produce greater tax savings when donated directly.

This example is simplified and does not calculate the donor’s actual tax savings.

​​​

Securities That Have Declined in Value

Investments that have fallen in value require different planning. A donation may still generate an eligible receipt, and the resulting capital loss may be available to offset certain capital gains. However, superficial-loss rules can apply if the investment is repurchased too soon. Consult your tax adviser before donating or replacing an investment with an accrued loss.

​

Other Tax Considerations

Eligible donations may also provide federal and provincial or territorial non-refundable tax credits. Unclaimed amounts can generally be carried forward for up to five years, while annual claim limits and special rules may apply.

Significant donations can also interact with the Alternative Minimum Tax. Your financial, tax and legal advisers can help you determine whether a gift of securities is suitable for your circumstances.

​

Turn Your Investments Into Lasting Impact

A gift of securities can help Universal Outreach Foundation create opportunities and lasting change while potentially offering you valuable tax benefits. Please contact us if you have any questions about the donation process or download the securities Letter of Direction form below and send it to you financial advisor. 

​

This information is general in nature and is not tax, legal or financial advice. Tax rules can change, and their application depends on individual circumstances. Please consult qualified professional advisers before acting on this information.