ZOOMER Magazine


Peter Muggeridge


Strategic donations maximize both gifts and tax breaks. explains how to get the most bang for your charitable bucks

made to a registered charity by Dec. 31, 2020 or any unclaimed donations from the previous five years. Remember, this is a non-refundable tax credit, so you can only use it to reduce the tax you owe. (Hint: Using the CRA’s charity tax calculator will help determine whether it makes sense to claim your spouse or common-law partner’s donations.)

ital gains tax. “One client originally bought stocks for $10,000 and over the years its value appreciate­d to $50,000. Had he sold the stock at market value, he would have triggered capital gains tax on the $40,000 appreciati­on. However, by giving the stock ‘in kind’ to a charity, he avoided capital gains and received a tax receipt for the full $50,000. This saved him about $35,000 in taxes.”

This is a strategy well suited to highincome donors, where they name a charity as the beneficiar­y of an RRSP or RRIF in order to eliminate tax owing on the registered money due upon their death.

Halpern, an expert in the use of life insurance for philanthro­py, explains how this strategy worked for a client: “A retired accountant in his mid-60s had a $500,000 life insurance policy he wished to donate to his alma mater. An independen­t actuary valued the policy at $290,000, which he donated to the university. In exchange, he received a charitable donation receipt for the entire $290,000 and saved himself $145,000 in taxes.”

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