BCE Stocks donations to Charity

In May 2006, the Federal Budget announced that donations of publicly listed securities to registered charities would be exempt from capital gains tax, effective immediately.   BCE recently decided to go private meaning all BCE shares need to change hands, this can have tax implications for BCE shareholders.              

BCE Buyout - Proactive Planning Can Save You Taxes

If you own BCE common shares, your shares are proposed to be purchased for $42.75/share in cash by a consortium led by the Ontario Teachers Pension Plan Board. BCE shareholders voted 97 per cent in favor of the offer at a special meeting that was held in Montreal on September 21, 2007

The buyout of your shares will potentially trigger a capital gain (or a capital loss) as a result of the sale. Fifty percent of your net capital gains (total capital gains less total capital losses realized in a year) are taxable as income.

Fortunately the deal is not set to close until the fourth quarter of 2008 and there is an opportunity to engage in some planning to minimize your taxes.

Donate to Eliminate

The 2006 Federal Budget eliminated the tax on capital gains arising from in-kind donations of publicly-listed securities to charitable organizations. If you own BCE and are philanthropically inclined, you might want to consider donating some of these shares to a registered charity such as the SOS Children's Villages Canada. Your capital gains tax will be reduced to zero and you will also receive donation tax credits (for the value of the BCE shares on the day of the donation to SOS) which can be used to reduce other taxes payable on other income.

You can donate sufficient shares to eliminate the taxes owing as a result of this transaction. You may claim donation amounts up to 75% of your net income each year. Any unused donation amounts can be carried forward for up to five years. A charitable donation strategy is a terrific way to eliminate the unanticipated tax consequence as a result of the BCE takeover.

No BCE shares? The same capital gains tax exemption applies to all publicly traded securities and thanks to the 2006 tax law change there has never been a better time to support a worthwhile organization with a donation of appreciated shares.

As everyone's situation is different, please consult with your tax and/or financial advisor.

When you are ready to make the donation please contact Dave Greiner at 1-800-767-5111 ext 14 to learn more or send him a note at d.greiner@soschildrensvillages.ca