Donating stocks could benefit church and reduce taxes

By on November 1, 2008

Anglicans are being asked to consider donating stocks to the church to avoid taking a big hit on their taxes.

Owners of Bell Canada shares – the most widely held stock in the country – could face huge capital gains tax bills in 2009, due to a planned privatization deal. However, if a donation of a portion or all of such BCE holdings is made directly to a registered charity such as the Anglican Church of Canada, this could eliminate the capital tax a shareholder would have to pay, said Archdeacon John Robertson, General Synod national gift planning officer. Capital gains are 50 per cent taxable, “which means a significant tax hit is waiting for many shareholders unless they take action immediately,” he said.

Archdeacon Robertson explained that when publicly traded stock is donated directly to a registered charity, “no portion of the capital gain is reported for tax purposes; a charitable donation receipt is issued for the current market value of the stock, making this gift more tax efficient than cash.”

He added: “This presents parishes, dioceses, General Synod and its national partners with an opportunity to encourage thoughtful and generous Anglican donors to support special projects, help build endowments, and provide urgently needed assistance for vital ministries in the North and with our overseas partners.”

BCE has more than 800 million shares, and in November they were to be purchased by the Ontario Teachers’ Pension Plan and its partners in the largest private equity deal in Canadian history – valued at $51.7 billion.

BCE will cease to be a publicly traded company on or before Dec. 11, and its shares will be surrendered as planned.

“The takeover deal pays $42.75 in cash for each BCE share, an approximate 40 per cent premium over the average trading price of BCE common shares in the first quarter of 2007,” explained Archdeacon Robertson. “Shareholders will not have the option to keep their share.”

He said that accountants calculate that if a person had 100 shares of BCE in 1977, the adjusted purchase price would have fallen to $0.25 a share “because of the effect of the stock splits, spin-offs, and other transactions.”

Archdeacon Robertson said that diocesan gift planning consultants and General Synod’s new department of philanthropy staff can help donors “solve their capital gains headaches by encouraging gifts for the work of God through the church.”

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