It’s been another challenging year in many aspects. On the one hand, the changing economic conditions have us wanting to be more conservative with our spending. For many, concerns about taxes, inflation or rising interest rates might impact decisions about charitable giving. At the same time, the holidays are typically a time when many of us want to give to support worthy causes in our community. As a board director for the KGH Foundation, I know first-hand the impact that your support has directly on Kelowna General Hospital and on health care right here in our community.
So what can you do?
Do well by doing good
The answer is: It’s never a bad time to give to charity. There are many financial benefits for donors and investors, despite what the markets may be doing in any given moment. And the silver lining is you can always do well by doing good.
Here are three approaches that may help to reduce your income taxes, while making an investment in the future of our community’s health care:
1. Despite recent market declines negatively impacting portfolio values for many investors, you might still own some publicly traded securities that are worth more now than when you bought them.
By gifting such stocks to the KGH Foundation, you can take advantage of Canada Revenue Agency’s exemption on capital gains tax for donations. Two loyal KGH Foundation donors recently applied this strategy to their annual giving plans.
“We know this isn’t a great time right now with the markets being down and the economy struggling,” they said. “But it’s important to keep giving to our hospital. We all need the care.”
Take advantage of a capital loss
2. Make losses work for you. If you own stocks that are currently in a loss position, donating these shares in-kind may improve your financial picture. Provided your investments meet CRA-approved cost basis methods, this scenario may also work for donations of cryptocurrencies.
You can also sell an investment whose value has gone down, create a capital loss, and donate the cash—with no taxes payable on that investment and the added ability to reduce your overall tax bill with a charitable donation deduction. For incorporated clients, extra care is needed to first clear out any balance that may be held in the corporate capital dividend account.
Capital losses can be carried back up to three years and carried forward indefinitely to offset capital gains realized on specific assets including non-registered investments, recreational and rental properties, and private company shares.
In addition, you have a charitable receipt in hand to claim the donation amount against your net annual income, in the current year or in one of the next five years.
Benefits to estate planning
3. You can gain peace of mind when you plan your estate now, yet far too many continue to put it off. Acting now helps to ensure your intentions will be fulfilled in line with your goals. Pre-planning can also assist with reducing the taxes on your estate.
For example, naming a charity like the KGH Foundation as the direct beneficiary of an RRSP or RRIF account transfers ownership of the plan upon your death. Probate fees may be avoided since the transfer happens outside of your will, and a large tax liability for your estate can be offset with the donation receipt.
For many, giving just feels right
In this season of giving, no matter what the market is doing, a gift to support the health and well-being of our community is not only deeply appreciated by the charities that benefit, it also feels right.
Giving to the KGH Foundation will make a difference right here in our community. Your generosity also sends a powerful message to our doctors, nurses and health-care staff that they have our continued support as we remain committed to advancing world-class care close to home for all who live in this vast and beautiful region.
Keep in mind: It’s never a bad time to give.
Every day at KGH, thousands of little miracles begin with a gift.
To learn more about charitable giving to the KGH Foundation, contact director of planned giving Colleen Cowman at [email protected].
The information provided in this column should only be used in conjunction with a discussion with a qualified professional advisor when planning to implement a strategy for your unique circumstances.
Shauna George, CFA, CFP is an investment counsellor with RBC PH&N Investment Counsel, board director and member of the planned giving and finance committees of the KGH Foundation.
This article is written by or on behalf of the sponsoring client and does not necessarily reflect the views of Okanagan Edge.
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