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A Bridge to the Future |
TRENT CONTENTS Proposed Change, Change ... and Debate Association President's Message Topping the Competitive Recruitment Environment The Interactive Learning Centre Profile of a Volunteer: Roy O'Brien '75 "How To" series Toronto realtor Mary Crawford '82 Collections and Obsessions : Jim Doran's Various Vinyl |
by Katie Brown Tax Planning and Gift Opportunity The demutualization of Canada's largest insurance companies will create what may seem like a windfall of almost $11 Billion for more than 2.5 million Canadian policyholders across the country. But this windfall comes with strings attached. If this distribution is taken in cash, the full amount will be taxable as a Canadian-source dividend in the year received. This could reduce eligibility for government benefits and senior's benefits in the following year. Policyholders who accept stock rather than cash will pay capital gains tax on 75% of the share values when they sell, as the shares will have a tax cost of zero. For those people who wish to support Trent University, are charitably inclined and would prefer not to incur additional taxes, there is an alternative -- provided they choose to receive shares rather than cash. Donating shares of any publicly-traded securities which have a value greater than their tax cost to a registered Canadian charity will reduce the capital gains subject to tax to 37.5% and the donor would receive a charitable tax receipt for the full market value of the shares. This reduction is available until December 2001, at which time the government plans to review this rate. The donor makes a generous gift to support education and research at Trent University, and applies the tax savings to tax due on other income. Example: Security valued at $20,000 is given to a registered charity ( cost base is zero ).
The example provided is for general illustration purposes. We advise consulting your financial advisors to confirm the tax implications of a transaction. To learn more about how this unique opportunity can help you support education and research at Trent University, please contact:
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