Eight ways to keep giving and save more this holiday season
RBC Wealth Management offers tips on charitable giving for challenging times
TORONTO, November 26, 2009 While the economy
is showing signs of recovery, many Canadian families still
face tough decisions about how to give as much as they would
like by year-end. RBC Wealth Management offers practical advice
on making your gifts go further.
"This holiday season, take a family approach to giving
to get the most out of your donations," said Anthony
Maiorino, Vice President, RBC Wealth Management Services.
"Integrating your giving with your financial planning,
tax management and family goals can significantly reduce the
taxes you pay and increase the benefits for yourself, your
family and the causes you support."
RBC Wealth Management's advice for making your gift go
1. Plan your giving as a family - Some families agree
on a vision and make a long-term commitment to support selected
causes. Asking your kids to help choose the causes can be
a great way to teach them about giving.
2. Give to a worthy cause in lieu of Christmas presents
for adult family members - Consider agreeing to donate
the money you would normally spend on a new sweater for your
brother-in-law to a charity instead.
3. Establish your own charitable gift fund - A charitable
gift fund allows you to create a lasting charitable legacy
without the time and expense of a private foundation. A registered
public foundation administers the assets, but you can decide
which charities receive grants. Investment earnings in the
fund grow tax-free and are available to fund selected causes
4. Check for donations unclaimed in previous years and
combine tax receipts with your spouse - Donations can
be carried forward for five years. If you make small annual
gifts, consider carrying forward your donations and then claiming
the combined donations to benefit from the higher tax credit
for gifts over $200. Maximize your family tax savings by claiming
all donations on the higher-income spouse's tax return.
5. Donate depreciated securities to reduce your taxes
- This could be a good time to donate underperforming
securities for a tax break. If you donate a security in kind
that has a capital loss, you can use the loss to reduce your
capital gains. After applying capital losses against any capital
gains in the current year, you can carry the balance of the
loss back three years or forward indefinitely to offset capital
gains in future years.
6. Give the gift of life
insurance - Consider
gifting a life insurance policy. You are eligible for a donation
receipt for the fair market value of the policy when you transfer
ownership to a registered charity. While you will be taxed
on any gain, it should be offset by the donation tax credit,
and in fact the credit may be larger than the gain. If you
are still paying the premiums after ownership is transferred,
you will get a tax receipt each year.
7. Designate a charity as a beneficiary on your RSP or
RIF - This strategy avoids probate taxes on your registered
plan. In addition, your heirs can claim a donation tax credit
on your final tax return to offset tax owed by your estate.
8. Donate through your company to get a tax-free dividend
- For owners of an incorporated business, a donation of
publicly-traded securities from the company may allow for
a tax-free dividend to the owner through the use of the Capital
Consult with your financial advisor and a tax professional
to determine whether these strategies are right for you.
RBC Wealth Management Services has a team of more than 80
financial planners, tax specialists, accountants, high-net-worth
specialists, lawyers, will and estate planners and other professionals
who work closely with advisors and clients across RBC channels
to deliver a level of integrated wealth management that has
traditionally only been available to the most affluent families.
About RBC Wealth Management
RBC Wealth Management directly serves affluent and high-net-worth
clients in Canada, the United States, Latin America, Europe
and Asia with a full suite of investment, trust and other
wealth management solutions. The business also provides asset
management products and services directly and through RBC
and third-party distributors to institutional and individual
clients, through its RBC Global Asset Management division.
RBC Wealth Management has more than $490 billion of assets
under administration, nearly $240 billion of assets under
management and more than 4,500 financial consultants, advisors,
private bankers and trust officers. RBC Wealth Management
was recognized as the Outstanding Private Bank in North America
by Private Banker International in October 2009.
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For more information, please contact:
RBC Corporate Communications, (416) 974-1031
RBC Media Relations, (416) 974-2124