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Tips for philanthropic Canadians

I would like to make a donation but also maximize my tax situation.

Q. I would like to make a donation but also maximize my tax situation. Do I have to make my donation before the end of the year or can I contribute before Feb. 28, 2010? Are there any limits to my gift? — Randy

A. For a 2009 tax deduction, charitable donations must be made before the end of the year. A 15 per cent tax credit is allowed on the first $200 with amounts over $200 at 29 per cent tax rate. Partners should combine their donation and utilize the five-year carry-forward period to maximize the deduction. Annual deductions are limited to 75 per cent of net income with excess amounts carried forward.

Nicola Elkins, CEO and founder of Benefaction Foundation and author of Master your Philanthropy, has some tips for philanthropic Canadians:

• Make gifts of securities instead of cash. Receive a tax credit for donation and pay no capital gains tax.

• Limit tax for estate by gifting your RRSP or RRIF. Naming a charity as beneficiary for your RRSP or RRIF can eliminate tax.

• Executives should consider donating optioned stock. Like public securities, donated portion may incur no capital gain tax.

– Henry Choo Chong, CGA, can be reached at choochonghcga@yahoo.ca.

 
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