The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Marketwire

Financial Literacy Month-BMO's Tip of the Day: Give the Gift of Securities and Benefit From Tax Savings

Thursday, November 15, 2012

Financial Literacy Month-BMO's Tip of the Day: Give the Gift of Securities and Benefit From Tax Savings08:00 EST Thursday, November 15, 2012TORONTO, ONTARIO--(Marketwire - Nov. 15, 2012) - To mark Financial Literacy Month, BMO Financial Group is releasing a series of financial tips throughout November. As part of BMO's commitment to 'Making Money Make Sense', the tips are designed to help individuals and families save and manage their day-to-day finances more effectively.BMO's Tip of the Day: Give the gift of securities and benefit from tax savings. The advantages of donating securities are two-fold:You receive a tax receipt for the fair market value of the donation in the amount of the closing trading price on the day, and the charity of choice receives the security. Your donation is exempt from the capital gains tax that typically applies to the sale of a security. Donating Securities Instead Of Cash*Example uses Ontario federal and provincial combined tax rateOption 1: Sell security and give cashOption 2: Donate security "in kind"Market value of security$10,000$10,000Cost base$5,000$5,000Capital gain$5,000$5,000Taxable capital gain (50 per cent)$2,500$0Tax due on gain at 46 per cent$1,150$0Tax receipt for gift$10,000$10,000Value of tax receipt at 46 per cent$4,600$4,600Net tax savings$3,450$4,600"This is a fast, simple and convenient way to make a difference and support a cause that you believe in," said Marvi Ricker, Vice President & Managing Director of Philanthropic Services, BMO Harris Private Banking. "As many Canadians look to participate in charitable giving, several organizations, such as United Way and other local community foundations, have made this alternative giving option available to investors looking to support great causes.""CFEE commends BMO's ongoing efforts to support Financial Literacy in Canada and promote ways in which Canadians can increase their competence and confidence when managing their personal finances on a day-to day-basis," said Gary Rabbior, President, Canadian Foundation for Economic Education (CFEE). BMO Financial Literacy Month Tips November 1: Maximizing TFSA investments annually over 20 years can save nearly $30,000 in taxes. November 2: Utilize rewards to squeeze the most value out of every dollar you spend this holiday season. November 3: Choose an investment advisor who is right for you and will help you meet your financial goals. November 4: Use your RRSP to help make the down payment on your first home. November 5: Space out payments to avoid cash-flow problems. November 6: Take advantage of the benefits of preferred shares. November 7: Consider investing in a Registered Retirement Savings Plan (RRSP) and taking advantage of tax incentives when saving for retirement.November 8: Take advantage of Canada's numerous online personal finance resources.November 9: Before you head off on your winter vacation, be sure you and your family are properly covered in the event of a medical emergency. November 10: Understand what you can hold in your RRSP. November 11: Stick to the one-third rule when planning the purchase of a home. November 12: Secure your retirement by opening a Registered Retirement Savings Plan (RRSP) as early as possible and contribute to it on a regular basis. November 13: As couples prepare for their wedding day, they should have "The Financial Talk" to help the transition from "my money" to "our money." November 14: Using a combination of a credit card, debit card and cash will give you convenience, security and flexibility when you travel or shop in the United States. For more on financial literacy, Canadians can visit the Government of Canada's Financial Literacy Month website, as well as BMO's Financial Literacy online resource. About BMO Financial Group Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $542 billion as at July 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.FOR FURTHER INFORMATION PLEASE CONTACT: Contact Information: Media Contacts:Rachael McKay, Toronto(416) 867-3996rachael.mckay@bmo.comValerie Doucet, Montreal(514) 877-8224valerie.doucet@bmo.comLaurie Grant, Vancouver(604) 665-7596laurie.grant@bmo.comInternet: www.bmo.comTwitter: @BMOmedia