Last Call! End of the Year Tax Strategies to Reduce Your 2015 Tax Bill
It’s that time of year again: last minute tax-planning season. We’ve all read the tax experts’ columns and heard business TV interviews warning us that the deadline is looming. We only have a few more weeks to be proactive and avoid that large tax bill come April. Luckily the Nature Conservancy of Canada (NCC) has a few strategies to keep more money in your pocket and to achieve your philanthropic goals.
Planning ahead is crucial for the Nature Conservancy of Canada (NCC), to achieve the best conservation results for nature as it is for our donors to achieve their financial and charitable goals for Canada’s wilderness and wildlife.
One way you can save on your income tax bill and make your annual charitable donation is through gifts of stock. In 2006 the Government of Canada announced a new tax law eliminating capital gains tax for donated securities. Since then NCC donors have seen significant savings on their tax bill by donating appreciated stocks.
Bob Atkinson is one such donor. He and his wife Wendy are long-term NCC supporters. For nearly 20 years they have helped conserve nature by mailing in annual cash donations. But when Atkinson, a retired chartered accountant, learned of the federal government’s new tax rules, he saw the opportunity to give even more.
“Now,” explains Atkinson, “rather than cashing out the stocks and being charged a capital gains tax, we can transfer them to NCC and receive a charitable tax receipt for the full amount. This makes a lot of sense as we’re now retired. We’re able to make our yearly donation without using up liquid funds and we know that the full amount is being used for a good cause.”
By donating stock to NCC the Atkinsons pay less tax, retain more of their money and make an investment in Canada’s natural future. It’s a win-win strategy.
Donating stock, particularly long-held shares with accumulated capital gains, is one of the most cost- effective ways to support the causes you care about. Typically, when you sell appreciated stock, you’re required to pay tax on 50 percent of the appreciated value or capital gains. However, if you donate the stock there is no capital gains tax owing and you receive a charitable tax receipt that will help offset other taxes.
Here are a few other tax strategies involving your stock investments that might fit your current personal, financial or tax situation this end of year:
- Donate to eliminate: If you could use shares to renovate your kitchen, make your annual charitable gift and eliminate the capital gains tax on the sale of the shares, would you? You can donate a portion of appreciated stock and receive a tax credit that will offset the amount of capital gains tax you’ll have to pay for the sale of other shares. But how can you sell, donate and eliminate the capital gains tax? Call us at 1-800-465-0029 ext.5 or visit natureconservancy.ca/securities and we’ll show you how.
- Donate your winners: Transfer high performing stocks to NCC and use the cash from the tax credit to repurchase the stock; thereby stepping up its adjusted cost base.
- Sell your losers: Sell underperforming stocks to trigger a capital loss and donate the cash proceeds to NCC. You’ll generate a tax credit and a capital loss to use to offset capital gains in the current tax year, three years prior or to carry forward indefinitely.
Our team at Nature Conservancy of Canada offers a wealth of information and resources that allow donors to reduce taxes and maximize their philanthropic impact on Canada’s natural heritage. Reduce your tax bill today!
To learn more about the Nature Conservancy of Canada please visit www.natureconservancy.ca
Disclaimer: As everyone’s personal, financial and tax situation is different, we strongly advise you to consult your tax advisor before making any decisions.