Gifts of Appreciated Securities

Giving cash is easy. Why would someone consider gifting an appreciated security?

If a donor has investment assets held outside of a registered plan (that is, in a taxable investment account), they may be better off donating investment securities instead of cash.

Why?

• When donating an investment asset that has gone up in value, the donor will receive a donation receipt for the full market value of the donation. And, because the investment was donated instead of sold, the donor will not have to pay any capital gains on the appreciated asset. Capital gains are only triggered when an investment is sold, not donated.*

• Donations from an investment account are not made from the cash flow used to fund day-to-day living expenses. Donors can choose to give from their future cash flow (their investments), instead of their current cash flow (their savings).

• the rules and calculations are different for a taxpayer required to pay alternative minimum tax