Tax Planning Strategies with our Community Partner Sagium

CMHA Calgary’s partner Sagium is inviting our donors to attend Tis’ The Tax Season: Magnify the Impact of Your Wealth Through Tax & Philanthropy Planning. 

Join Rick Green, Founding Partner of Sagium, and Spencer Mellace, Wealth Strategist and Partner of Sagium, as they take you through a values-based approach to tax and philanthropic planning, followed up with a live Q&A.

Wednesday, December 1 at 11:00 am MST
Hosted via Zoom
Meeting ID: 966 3857 8541
Password: 743639

Join to learn about:

• Trends in finance and planning, holistic planning, and planning tools
• Prepare yourself for tax season with timely year-end tax strategies
• Enhancing your charitable gifts through the donation of shares and life insurance
• Combining family enterprise and philanthropy – the gifting of private shares

How Can Tax Planning Impact My Charitable Giving?

Considering some different ways to support CMHA Calgary this giving season? Here are some examples provided by Founding Partner, Rick Green of Sagium. 

At this time of year, as we start preparing for some quality family time, we also need to start planning year-end tax strategies to help with our taxes due in April 2022.

There are typical strategies around selling off capital losses against capital gains to minimize tax, RRSPs, TFSA contributions, etc. But there are other important strategies to consider, that will also help those most in need at this time of year. Anyone with charitable intent can combine their tax planning along with their philanthropy planning to achieve some very good results.

Example 1: 

Many people liquidate their investments in a separate transaction and then donate money to a charitable organization. This isn’t very efficient as you have to pay tax on the liquidated investment and then can only donate the balance and get a tax credit on a lesser amount. As a result, CRA gets a big chunk of money that you could otherwise direct to your favourite charities. With markets performing so well and many stocks ripe with capital gains there are better ways to do this. CRA allows you to donate the shares of a publicly-traded company directly to the charity. The result is that you don’t pay any taxes on the pent-up capital gains and you get a tax credit for the entire value of the shares. $100,000 of capital gains liquidated and then donated only gets $76,000 to the charity and a tax credit of $38,000. A gift of shares directly to the charity gets the full $100,000 to the charity and a tax credit of $50,000 for the donor. (Tax credits in Alberta are 50 – 54% depending on income).

Example 2:

Let’s say you know you have $100,000 in capital gains but could use some cash to cover some spending goals over the next period of time. Liquidating the capital gains would give you $76,000 in after-tax money to spend after paying $24,000 of tax. Alternatively, if you have some charities that you would like to help out you could donate $35,000 of the $100,000 of capital gains in public stock to the charity. This will provide you with a tax credit of $17,500. So when you liquidate the remaining $65,000 in capital gains you would offset the $15,600 in tax due for those gains with the tax credit leaving you $66,900 to spend. In this example, for less than $10,000 you were able to get $35,000 to the charity.

These examples are just illustrations using a 50% tax credit and a 48% tax rate. There are some other more complicated strategies using life insurance, leverage and private company shares that can allow you to multiply your gifts to charity as well as save some tax and improve your estate plans.

If you are interested in the above strategies in more detail, tune into the Sagium Tax Planning webinar on December 1, which will include a live Question & Answer session.

Our Peer Support program services can be accessed over the phone at 403-297-1402 or through email at peer@cmha.calgary.ab.ca. We have teamed up with other Calgary agencies to help Calgarians quickly and easily access various counselling and social supports. Visit www.communityconnectyyc.ca, where you can book online for our Suicide Bereavement and Family Support Counselling, and other supports. If you prefer to still book through us, please phone (403-297-1708), or email (counsellingintake@cmha.calgary.ab.ca).