Skyline Wealth Management and RLB discuss the Tax Benefits of Charitable Giving

Article Transcript – Watch Skyline Wealth Management and RLB discuss the Benefits of Charitable Giving

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Ray Punn: [00:00:26] During the holiday season. Charitable giving is something that can be top of mind for many Canadians. Joining me today is Shawn Deyell, Accountant and Partner at RLB Accounting Firm. I’ve asked Shawn to provide insight and answers to some of the questions that you may have around tax benefits and implications that go along with charitable giving. Shawn, thanks for joining me today.

Shawn Deyell: [00:00:44] Thank you for having me.

Ray Punn: [00:00:46] All right. Let’s get started. Shawn, can you provide some details on the benefits of charitable giving from your perspective? And what should individuals consider when they want to get involved?

Shawn Deyell: [00:00:56] Certainly. First, it feels good to help. It’s it’s great to contribute to society, to help others, to move important initiatives forward. And it’s good to find causes that are close to somebody who wants to give something that they are involved in, something that might recognize a friend or family member. If they’ve been impacted or involved in a certain cause, they may want to involve others in deciding when they’re dealing with the broader well. It could involve a spouse, child, other family members, possibly colleagues or employees within a business. But actually, it may not be an outright advantage, but giving tax effectively can allow for more impactful giving to a charity.

Ray Punn: [00:01:35] Thanks, John. What is the different methods that can be utilized when considering charitable giving?

Shawn Deyell: [00:01:40] Giving may take the form of a one time cash contribution, some pledge or giving over time, or you might have more complex structures such as a gift of property or life insurance policy and tax advantages could be a factor as well. Just as an example, gifting shares, other qualifying securities can be particularly tax effective.

Ray Punn: [00:02:01] Shawn You touched on the gifting of shares. Can you give me a little bit more details on this?

Shawn Deyell: [00:02:05] Certainly there are some special tax rules for donating publicly traded securities or mutual fund units, Skyline units, as an example. The donation credit is based on the full amount, the full value of what is donated, whereas the capital gain on a donated share security is tax free. It doesn’t work for certain things like registered investments, RRSP’s, TFSA’s. But these rules can apply to investments both personally or through a corporation.

Ray Punn: [00:02:32] Thanks, Shawn. Now that we have a little bit more insight on the benefits and tax advantages, how can one qualify that their donation is actually going towards a good cause?

Shawn Deyell: [00:02:42] I think it starts with considering what a good cause means to you. What’s important, What’s valuable. Also, watch for fraud. Do your research. Make sure that it is legitimate charity. Canada Revenue Agency has a list of charitable organizations in Canada and also lists those who’ve had their status revoked or suspended. Beyond that, I think seeking out information regarding the charities activities, what the purposes are, how their funding is spent. What they do for fundraising and administration. If that’s too high, that charity might not be the right choice for you.

Ray Punn: [00:03:17] Thanks, John. Finally, are there any strategies when considering the right time to give?

Shawn Deyell: [00:03:22] Someone should consider giving during their lifetime compared to giving through their will or through their estate? I think they should also consider the stage of life. Retirement, for example, or matching with their wealth goals. It’s important to align with significant income when there’s a major financial event such as a significant gain on a business or property sale. And also, of course, tax and cash flow before the end of the year is another good strategy to help with taxes. And for many, there is no time like the present.

Ray Punn: [00:03:55] Thank you, Shawn, for taking the time to share your insights with us. If you’re looking into taxable benefits, it’s always best to speak with your tax professional. If you have any questions from this information session, you can contact your Skyline Wealth Management representative or simply email us at Invest at Skyline Wealth Management. Okay. Thanks for watching.