BMO Financial Group

BMO Financial Group

November 14, 2011 09:00 ET

National Philanthropy Day Meets Financial Literacy Month-BMO's Tip of the Day: Give the Gift of Securities and Benefit From Tax Savings

TORONTO, ONTARIO--(Marketwire - Nov. 14, 2011) - To mark Financial Literacy Month, which was launched by Finance Minister Jim Flaherty, BMO is releasing a series of financial tips throughout November. And with National Philanthropy Day tomorrow, today's tip is designed to help individuals and families 'Make Money Make Sense' with their charitable giving.

BMO's Tip of the Day: Canadians can give the gift of securities and benefit at tax time.

  • The advantages of donating securities are two-fold:

    1. You receive a tax receipt for the fair market value of the donation in the amount of the closing trading price on the day, and the charity of choice receives the security.
    2. Your donation is exempt from the capital gains tax that typically applies to the sale of a security.
Donating Securities Instead Of Cash
*Example uses Ontario federal and provincial combined tax rate
Option 1: Sell security and give cash Option 2: Donate security "in kind"
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% $ 1,150 $ 0
Tax receipt for gift $ 10,000 $ 10,000
Value of tax receipt at 46% $ 4,600 $ 4,600
Net tax savings $ 3,450 $ 4,600

"This is a fast, simple and convenient way to make a difference and support a cause that you believe in," said Marvi Ricker, Vice President & Managing Director of Philanthropic Services, BMO Harris Private Banking. "As many Canadians look to participate in charitable giving, several organizations, such as United Way and other local community foundations, have made this alternative giving option available to investors looking to support great causes.

BMO Financial Literacy Month Tips

November 1: Pay more than the minimum payment on a credit card balance.

November 2: Choose a shorter amortization for your mortgage.

November 3: Contribute to a child's Registered Education Savings Plan (RESP) as early as possible.

November 4: Invest in a Tax-Free Savings Account (TFSA) to maximize your savings.

November 7: Switch to weekly mortgage payments to save interest and become debt-free faster.

November 8: Take advantage of credit card travel insurance to lower costs.

November 9: Start early and contribute often to your investment account, rather than waiting to invest.

November 10: Consolidate High-Interest Debt With a Line of Credit to Reduce Costs

For more on financial literacy, BMO encourages Canadians to visit and

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