A call to the more fortunate
Recently the company I worked for was taken over; consequently I received a windfall along with a large tax obligation. I was very pleased to learn from an
accountant that charitable donations can be used to offset capital gains tax and, depending on the type of donation, additional credit(s) can be realized.
After consultation with the charitable organization Covenant House and my accountant, I opted to donate shares by exercising stock options. The consequence
of buying the options and donating the certificate to the charity directly rather than taking ownership of the share certificates and then donating the
shares bypasses any capital gains tax associated with the transaction.
I know that there are others who belong to CIM who may find themselves in a similar situation to my own given all of the recent mergers and acquisitions
and would like to suggest that they too consider a similar strategy. Contributions to charities or organizations that help/serve our communities are
desperately needed and, if done properly, capital gains tax can be offset.
Most registered charities have knowledgeable staff who are familiar with these types of donations. The key is to work with a competent accountant who can
advise you of the benefits and liabilities when making charitable donations.
– Joe Milbourne