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  1. #1
    Senior Member Zookeeper's Avatar
    Join Date
    May 2003

    Southeast Asia Disaster

    As I'm sure everyone is well aware of this, I thought I would take a moment and copy an Email that my firm sent out to our clients today.

    As some of you know, I am a Financial Planner with a local firm in Ottawa, and we have had quite a few requests for information regarding the financial implications of making charitable perticular with regards to the Southeast Asia Disaster.

    I composed this general Email today, and some of you may also find the info useful. It is not intended as a solicitation for my firm, for anyone to donate, or any perticular charity....merely for information for those who choose to make charitable donations......

    "As everyone is now aware, the New Year has brought with it immense devastation in Southeast Asia. The tsunami that struck on Dec. 26th has resulted in over 100,000 deaths with more expected, and the rest of the world is responding with a massive relief effort.

    Since opening yesterday, we have received a number of calls from clients who are interested in making charitable donations to the Southeast Asia relief effort. Advice is being sought on the best financial methods for doing so. As such, we have taken a moment to compose this Email to all of our clients who are interested in making charitable donations.

    This Email is not intended as a solicitation for donations, nor is it an endorsement by Craig & Taylor Associates of any particular charity or donation strategy.

    General Tax Treatment of Charitable Donations:

    Registered charitable organizations will issue you with a tax receipt for the amount of your donations and these should then be reported on Schedule 9 of your tax return, and on lines 33 and 34 of your provincial return. Donations over $200 for the year give you a tax credit of 29% at the federal level with additional credits at the provincial level so that the total credit will be about 45% of the donations above $200. For the first $200 of donations the credit against taxes owing is only about 22% of the amount donated so if you and your spouse donate separately we advise combining the receipts and reporting these together on a single tax return. If the higher earning spouse is subject to provincial surtaxes then claim the credits on the return with the higher income. The maximum amount of donations you can claim in a year is 75% of your Net Income, but if you have receipts for even more than this you can save the extra receipts and claim the associated credits in any of the following five years!

    As a rough guide here are some figures for the person who has Net Income of $60,000: a $100 donation will result in a $22 reduction of taxes, a $1,000 donation will result in a reduction of taxes by about $385, while a $10,000 donation will reduce taxes by over $4000. Unlike your RRSP contributions which reduce the level of your income on your tax return, charitable donations result in a direct reduction from taxes owing, so the credits will apply relatively equally to all taxpayers regardless of the individualís marginal tax rate, but if your income is less than $25,000 then the taxes you owe will be insufficient to be able to utilize the full credit on a $10,000 donation and you will need to carry forward some of the credit to a future year!

    Other Issues to Consider:

    ∑ Most charities do not issue tax receipts for donations under $25.00, so consider making a single contribution above this amount so that you receive a tax credit receipt that you can use when you file your income tax return.

    ∑ Since the Government via the Canadian Tax Act effectively subsidizes all claimed charitable donations by giving Canadians a tax credit, Consider using the estimated tax savings from your donation, to make an additional donation.

    ∑ Charitable donations do not have to be cash. You can donate any type of asset, including stocks, and mutual fund units. If you contribute appreciated shares in-kind rather than cash, there's an extra benefit. You not only get the standard charitable tax credit on the fair market value of the shares but you also need only include 25% (rather than 50%) of the capital gain as income. Please note however, that if you are planning to contribute shares or units that are in a capital loss position, sell them first, and donate the actual cash. This will allow you to claim the full capital loss (ie: 50%).

    ∑ The Federal Government has announced it will match on a one-to-one basis, donations from Canadians to the tsunami relief efforts. Donations made by Canadians to Canadian non-governmental organizations including the Canadian Red Cross, CARE Canada, Oxfam, World Vision, UNICEF, Doctors Without Borders and Save the Children will be matched retroactive to December 26, 2004. A full list of eligible charities can be found on the website of the Canadian International Development Agency (CIDA) at , or by calling the CIDA information line at 1.800.230.6349. This offer will be re-assessed on Jan. 11, 2004 and may be closed at that time.

    ∑ The Federal Government has announced that it will also allow Canadians to claim contributions made up until January 11, 2005 on their 2004 tax return, should they wish for the purpose of claiming charitable tax deductions. As above, donations must be made to the eligible charities as listed at , or by calling the CIDA information line at 1.800.230.6349.

    ∑ Check with your current employer, trade association, union or other organizations you may be affiliated with. Many of these groups also offer donation matching programs. For example, Doctors Without Borders provides a list of participating donation matching organizations at their website . Combined with the Federal Government matching offer, this could in effect quadruple your donation!

    ∑ Did you receive a gift card over the holidays? If so, many retailers including Sears, Canadian Tire, Best Buy and Future Shop have announced that they will accept those cards back as donations to the Red Cross, and match them. Again, this could quadruple your donation when combined with the Federal Government matching offer.

    We hope that you have found this Email informative, and if you have any questions, please feel free to contact us.


    Craig & Taylor Associates"

  2. #2
    Senior Member piatchie's Avatar
    Join Date
    Nov 2004
    It's nice to know that we can come together as a "People" in a time of need! I'm glad the government is matching $ for $. i also think the gift card idea is very cool!

    Why is it called "cargo" when it goes by ship, and "shipment" when it goes by car?

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