|
Vancouver Sun
Smart Money Section
Friday, December 09, 2005
Adrian Mastracci, investment counsel at Vancouver’s ‘fee-only’ KCM Wealth Management, suggests, "If you will be selling stocks, bonds or mutual funds, and making a charitable contribution in 2005, consider donating the eligible securities directly to the registered charity.”
Donating securities
If you will be selling stocks, bonds or mutual funds, and making a charitable contribution in 2005, consider donating the eligible securities directly to the registered charity, especially if the securities have an accumulated capital gain.
The incentive is that the capital gains inclusion rate on the donated securities is reduced from 50 per cent to 25 per cent. Hence, you pay a tax rate of about 11 per cent at the top marginal rate.
The charitable donation credit is based on the market values of the donated securities. In essence, the registered charity sells the security instead of you.
However, start as early as you can if you consider this, says Adrian Mastracci, a fee-only investment adviser in Vancouver. Ask your favourite charity how you go about it. You may have to coordinate the transfer from your investment account to the charity's account.
Automobile capital cost
Canada Revenue Agency has confirmed that the ceiling on the capital cost of passenger vehicles for capital cost allowance purposes will remain $30,000, plus federal and provincial sales taxes, for purchases in 2006. This ceiling restricts the cost of a vehicle on which CCA may be claimed for business purposes.
The limit on deductible leasing costs will remain at $800 per month, plus taxes, and the maximum allowable interest deduction for amounts borrowed to purchase an automobile for business purposes will remain at $300 per month.
The limit on the deduction of tax-exempt allowances paid by employers to employees using their vehicles for business purposes will increase by five cents to 50 cents per kilometre for the first 5,000 kilometres, and 44 cents for each additional kilometre.
|
