Can You Donate Stocks to Registered Charities?

Have you ever wondered if you can donate shares to a charity instead of giving cash? Well, the answer is yes! Donating shares can be a great way to support causes you care about while also potentially getting tax benefits. But how does it all work? Let's break it down step by step.

1. What is a donated share?

• A donated share is a gift of stock or ownership in a company that you give to a charity instead of money.
• If the share is listed on a public stock exchange, the charity can issue a receipt for its fair market value on the day you donate it. If not, special rules apply to determine its value.

2. When is the share considered donated?

• The date a share is considered donated is when the ownership is officially transferred.
• According to the Canada Revenue Agency, ownership is transferred when the charity gains rights like receiving dividends, liquidation amounts, or voting rights associated with the share.

3. Can a charity refuse a share?

• Yes, a charity can refuse a share donation for various reasons, like if the company's values clash with theirs.
• It's essential to contact the charity beforehand to ensure they accept shares as donations.

4. How are shares transferred?

• Most shares are transferred electronically, with the donation date being when the shares are received in the charity's or its broker's account.
• Both the donor and the charity must agree to the donation, and all rights to the shares must be transferred.

5. Donations from an estate:

• If a donation is made from an estate after 2015, it's considered made when the property is transferred to the charity.
• The fair market value of the donation is determined at the time the charity receives the property.

6. Determining the value of shares:

• The fair market value of shares listed on a public stock exchange is typically determined by the closing bid price on the day of donation.
• For shares not publicly traded, getting professional advice might be necessary to determine their value.
  

Donating shares to a charity can be a meaningful way to support causes you care about. Understanding when and how shares can be donated, as well as their value, is crucial for both donors and charities. Remember to reach out to the charity beforehand and consider seeking advice from a charity lawyer for accurate valuation. By donating shares, you're not only giving back but also potentially gaining tax benefits while making a positive impact on the world around you.

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