Publicly traded securities

About Gifts of Publicly Traded Securities

A gift of securities is one of the most cost-effective ways to support UCalgary, immediately or through a gift in your will. When publicly listed securities are donated to UCalgary, the tax on the capital gains is eliminated. Any publicly listed securities, including shares, bonds, warrants, stocks, mutual funds and segregated fund units qualify.

Your benefit

This type of giving provides enormous benefits to both you and the university, including:

• A tax receipt for the fair market value of your gift.
• If the securities have appreciated in value, your estate will not be taxed on the capital gains.
• Lower tax costs than if you were to sell securities and donate the cash proceeds.

Ways to give

You can make your gift of securities in one of three ways:

• Electronically transferring funds from your account to the university’s brokerage account.
• Endorsing and delivering share certificates to the University of Calgary’s broker.
• Sending the securities to a transfer agent for re-registration in the university’s name.

The university will sell the shares as soon as possible and transfer the proceeds to the program or project you choose. The gift’s value is assessed at the close of the market on the date of transfer, delivery or re-registration.

As you consider a gift of securities to the University of Calgary, we can work with you and your advisors to designate your gift and provide specific details on transferring securities. Please contact us for more information or to arrange an appointment at your convenience.

Joe wants to make a donation to the University of Calgary and he’s thinking of selling some securities and donating the cash. A friend tells him it’s better to donate the securities directly because he won’t have to pay any capital gains tax.

Let’s say Joe pays taxes in Alberta, has a marginal tax rate of 39 per cent, and the fair market value of his shares is $20,000. The adjusted cost base of his shares — a calculation used for tax purposes — is $5,000.

You can see that it makes better sense for Joe to donate the securities directly.

We’re assuming he’s eligible for the 50 per cent Alberta charitable tax credit. (The first $200 of a charitable donation is eligible for only a 25 per cent charitable tax credit). In this case, we’re assuming Joe has already donated $200, so he is eligible to deduct a full 50 per cent of his donation to the University of Calgary.

The charitable tax credit may be claimed for donations of up to 75 per cent of your net income for the year, and it may be carried forward for five years. The limit increases to 100 per cent of net income in the year of death and the preceding tax year.

Eligible securities may include shares, bonds, bills, warrants, futures and units in mutual funds that are traded on Canadian, American and/or other major international exchanges.

There may be special conditions for gifts of private shares, employee stock option shares, flow-through partnership units and securities sold at a loss. Your donation may also be affected by donation limits, timing and nature of the gifted asset.

A receipt is issued for the value of the securities at the closing trading price on the day the university receives delivery of the shares.