CHARITABLE DONATIONS ON DEATH FOR PUBLICLY-TRADED SECURITIES

April 29, 2021
All Tax Articles

When a person makes a gift or donation of property other than cash, the person is normally deemed to receive proceeds of disposition equal to the fair market value of the property. This deeming rule can trigger a taxable capital gain or allowable capital loss, depending on whether the property is worth more or less than its cost.


However, taxable capital gains from the donation of most publicly-traded securities are deemed to be nil and therefore are not included in income. (Similarly, gains from donations of certified ecological property or cultural property are not included in income.)


When you die, there is a rule that provides that your property is deemed to be disposed of for fair market value proceeds (unless it is left to a spouse or common-law partner). 


However, if the property is donated, generally within 60 months of death, and qualifies for the donations credit (as described in the preceding article), no taxable capital gain results on death or from the donation. This rule results in a complete tax-free “rollover” both upon your death and on the donation. 


This letter summarizes recent tax developments and tax planning opportunities from a third-party affiliate; however, we recommend that you consult with an expert before embarking on any of the suggestions contained in this blog post, which are appropriate to your own specific requirements. Please feel free to get in touch with Lee & Sharpe to discuss anything detailed above, we would be pleased to help.
Adam H. Sharpe

Hello, my name is Adam Sharpe, I am a partner at Lee & Sharpe.

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