The Grinch and charitable giving at Christmas

“And the Grinch, with his Grinch-feet ice cold in the snow,

Stood puzzling and puzzling, how could it be so? It came without ribbons. It came without tags. It came without packages, boxes or bags. And he puzzled and puzzled ‘till his puzzler was sore.

Then the Grinch thought of something he hadn’t before.

What if Christmas, he thought, doesn’t come from a store?

What if Christmas, perhaps, means a little bit more?”

This quote is by Theodor Seuss Geisel, commonly known to most people as Dr. Seuss.

The Christmas season is upon us. Christmas is a time for giving and sharing. The donation of money, time, expertise, services or anything you wish to give is your gift to the community.

At Christmas, the need for food, shelter and warm clothing is huge. Local charities depend heavily upon volunteers to organize activities, provide meals, holiday hampers and other services to people throughout the valley. Can you help? This simple act of sharing can kindle and strengthen your Christmas spirit. The benefits of giving are both tangible and immediate.

When donating money or gifting to charity, saving taxes is not usually the primary consideration, but it is certainly a nice benefit.

For organizations to issue a valid income tax receipt for any gift, the charity must be registered with Canada Revenue Agency and have a charitable number.

Check the website to see if your intended charity is qualified to issue you a charitable donation receipt.

The amount of the charitable receipt depends upon the market value of the gift at the time it is made. F

or cash donations, the market value is identical to the dollar amount donated. For donations made after March 20, 2013, qualifying first time donors may receive an additional federal tax credit of 25 per cent on the first $1,000 of monetary donations. A nice bonus if this applies to you.

This additional credit can only be claimed once between 2013 and 2017 so the end is near.

Did you know that charitable gifts can also include stocks, bonds, real estate or the cash value of an insurance policy?

For businesses, donations can include products, cash, materials or equipment to name a few choices.

Gifts of services such as time, skills or effort are not considered to be property therefore registered charities cannot issue official donation receipts for services.

Gifts of publicly traded securities and mutual funds have additional tax benefits. The taxable capital gain on these donations is zero. When a security is donated in 2017, zero of the capital gains are included in your income. Certain conditions apply so first ensure your stocks qualify.

(Under normal circumstances 50 per cent of capital gains are included in your income).

Now is the time to make plans if you want the actual transfer of securities to occur before Dec. 31.

You will not be able to donate securities at the last minute since the charity must have enough time to arrange the necessary documentation.

Donations can reduce your total personal income tax bill. The first $200 of donations receives a federal tax credit calculated at 15 per cent.

For donations over $200 the credit is calculated at 29 per cent. This makes it very worthwhile to accumulate donation amounts over $200 and have one spouse deduct them.

If you are a first-time donor – then there are additional benefits you may receive for monetary donations up to $1,000.

People leave specific gifts or part of their estate to many charities through their will. This allows them to enjoy these assets during their lifetime, yet gives a valuable gift to charity upon their death.

Such gifts can also result in substantial tax reductions for the estate and the individual. If you wish to leave part of your estate to charity, make sure your will reflects these intentions. From the Grinch himself : What if Christmas, perhaps, means a little bit more? Marion Wahl is a certified general accountant who offers accounting and tax planning services to individuals and small businesses. She is a member of the CGA Association of B.C. Call her at 250762-3362 or email at mwahl@wahlcga.com.