Gift of Capital Property

A gift of property can be a mutually beneficial way for a donor to support the education objectives of Lakeland College. A donor can make the gift of property outright or can irrevocably assign ownership of the property now and receive the tax benefits while continuing to enjoy ownership. The eventual sale of the property will provide funds to support the work of Lakeland College. We recommend that you consult an accountant or tax specialist on what or how to make a capital property gift.

Here are some examples of capital property:

Securities and Investments
A donor can assign listed securities (stocks, bonds, mutual funds, RRSPs and GICs) to Lakeland College or the donor may donate only the earnings from dividends and interest. For more information on recent changes in tax law, see Gifts of stock and appreciated securities. Donating publicly traded stock and securities is a tax-efficient way of supporting Lakeland College. You will receive a tax receipt for the appreciated value of your gift without generating a taxable capital gain. Gifts of stock and securities provide benefits to the donor: as the capital gain inclusion rate of 50 per cent on selling appreciated stocks is avoided when shares are directed to Lakeland College (as opposed to selling and then donating the proceeds). Also, the capital gains taxable inclusion rate for a gift of appreciated capital property is 25 per cent. The five-year carry forward provision on unused donation amounts is permitted.
Real Estate
Houses, commercial properties and land can be valuable donations. When the asset is sold, the proceeds will be used by Lakeland College to continue its education and research activities. A tax receipt will be issued to the donor for the sale price of the real estate minus any associated sales costs.
Personal Property
Valuable jewelry, antiques and art can be used to make a substantial charitable donation. The donor will receive a tax receipt for the fair market value of the property based on an independent appraisal. There are potential tax implications associated with such donations. Donors may have to declare a portion of the value as income. A gift may be considered to be a disposition of capital property triggering a capital gain. However, in most cases the donation tax credit usually exceeds the tax payable.
Specifics of Capital Property Donations
Capital property includes depreciable property and any property that, if sold, would result in a capital gain or a capital loss. Capital property is bought for investment purposes or to earn income. It does not include the trading assets of a business, such as inventory. The following properties are generally capital properties: cottages securities such as stocks, bonds and units of a mutual fund trust land, buildings and equipment used in a business or rental operation If you donate capital property, Canada Revenue Agency considers you to have disposed of that property for proceeds equal to the fair market value (FMV) of the property. You have to report any capital gain on your return in the year you donated the property. You can choose an amount that is not greater than the FMV and not less than the greater of: any advantage in respect of the gift; and the Actual Cost Base (ACB) of the property (if the property was depreciable property, the lesser of its ACB and the undepreciated capital cost of the class of the property). For more information, go to proceeds of disposition on the Canada Revenue website.