After-tax Donations • Let Inspiration Shine

A commitment paid over a period of 4 to 5 years can be a very manageable daily amount

The actual after-tax cost of your donation to the Inspired Spaces Campaign may be less than you think as each and every dollar that you donate is 100% deductible for tax purposes. The actual amount of tax that you save depends on your marginal tax rate which, in Manitoba, can be as high as 46.4%.

Example at highest Manitoba marginal tax rate of 46.4%; donation spread over 5 years.

Total Donation Annual Donation Amount Annual Tax Savings Annual After-Tax Cost Monthly After-Tax Cost Daily After-Tax Cost
$250,000 $50,000 ($23,000) $26,000 $2,233.33 $73.42
$100,000 $20,000 ($9,280) $10,720 $893.33 $29.37
$50,000 $10,000 ($4,640) $5,360 $446.67 $14.68
$25,000 $5,000 ($2,320) $2,680 $223.33 $7.34
$10,000 $2,000 ($928) $1,072 $89.33 $2.94

Example at middle-income Manitoba marginal tax rate of 39.4%; donation spread over 4 years.

Total Donation Annual Donation Amount Annual Tax Savings Annual After-Tax Cost Monthly After-Tax Cost Daily After-Tax Cost
$100,000 $25,000 ($9,850) $15,150 $1,262.50 $41.51
$50,000 $12,500 ($4,925) $7,575 $631.25 $20.75
$25,000 $6,250 ($2,463) $3,787 $315.58 $10.38
$10,000 $2,500 ($985) $1,515 $126.25 $4.15
$5,000 $1,250 ($493) $757 $63.08 $2.07

Donating shares can offer tax savings

In the May 2006 Federal Budget, publicly listed securities donated to charitable organizations became exempt from any capital gains tax. The 2008 Federal Budget expanded this list of securities which now includes the following:

  • Shares listed on most Canadian and certain foreign stock exchanges
  • Shares of the capital stock of a Canadian public mutual fund corporation
  • Units of widely held Canadian mutual fund trusts

The benefits of donating a gift of securities to the Westgate Capital Campaign are:

  1. You will receive a tax receipt for the fair market value of the donation in the amount of the closing trading price on the day Westgate receives the security.
  2. Your donation is exempt from the capital gains tax that typically applies to the sale of a security.

Example at highest Manitoba marginal tax rate of 46.4%.
Market value = $10,000; cost base = $5,000.

Option 1: Sell Security and Donate the Cash to Westgate Option 2: Donate the Security Directly to Westgate
Market value of security $10,000 $10,000
Cost base $5,000 $5,000
Capital gain $5,000 $5,000
Taxable capital gain (50%) $2,500 $0
Tax due on gain at 46.4% $1,160 $0 (A)
Donation tax receipt for gift $10,000 $10,000
Value of tax receipt at 46.4% $4,640 $4,640 (B)
Net tax savings to you $3,480 $4,640 (B-A)

Example at middle-income Manitoba marginal tax rate of 39.4%.
Market value = $10,000; cost bast = $2,500.

Option 1: Sell Security and Donate the Cash to Westgate Option 2: Donate the Security Directly to Westgate
Market value of security $10,000 $10,000
Cost base $2,500 $2,500
Capital gain $7,500 $7,500
Taxable capital gain (50%) $3,750 $0
Tax due on gain at 39.4% $1,478 $0 (A)
Donation tax receipt for gift $10,000 $10,000
Value of tax receipt at 39.4% $3,940 $3,940 (B)
Net tax savings to you $2,462 $3,940 (B-A)

 

The larger the unrealized capital gain in your securities, the greater the tax savings to you by donating the securities directly to Westgate. For further details on transferring securities to Westgate, please contact the school, or email BeTheLight@westgatemennonite.ca (Note: Due to the higher cost of processing this type of gift, Westgate can only accept security transfers valued at $1,000 or more.)

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