Gift of securities
Publicly traded securities include shares, bonds, mutual fund units or other similar securities. Even if a gift of private shares may be acceptable under certain conditions, publicly traded securities are mostly accepted by IRIC/Université de Montréal, especially for their tax incentives.
Since 2006, the federal and provincial governments have eliminated the capital gains tax on donations of publicly traded securities to registered charities. That tax incentive makes the gift of publicly traded securities more attractive than ever. For example, when a donor choose to sell some securities, he is liable to pay a tax on 50% of the capital gain amount which is the sale proceeds less the adjusted cost base of the securities. But if a donor decides to give some securities to IRIC/Université de Montréal, he or she pays no tax on the capital gain. Moreover, the donor receives a charitable tax receipt for the full value of the securities upon transfer.
There are some important steps to keep in mind when donating securities, particularly:
- the donor is invited to contact IRIC’s Development Officer to discuss any matter relating to the intended donation;
- IRIC’s Development Officer will inform the donor on how to make an electronic transfer of securities from his or her broker to the broker of IRIC/Université de Montréal;
- the broker of IRIC/Université de Montréal will forward to the Office of development and alumni relations the appraisal of the fair market value of the securities;
- the Université de Montréal will issue the receipt for tax purposes.