Donation Tax Shelterfor Canadian Donors and Charities |
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Tax Shelter ID number TS06816-3 An Overview WIN/WIN DONATING
TAX ADVANTAGES OF DONATING TO CHARITY It is the will of the Canadian government to reward and motivate Donors to give generously to better Canadian society and society around the world. In the CCRA publication “Tax Advantages of Donating to Charity” the government states “Charities play a vital role, both in Canadian society and around the world. Generous tax incentives have been created to encourage gifts by individuals and corporations to registered charities”. For donations that exceed $200 in a taxation year, tax credits are provided based on your province of domicile – Ontario’s donation tax credit is currently 40.16% to 46.41% depending upon your level of provincial surtax. Tax credits are like cash. They directly reduce taxes payable unlike deductions from income. The annual donation level for charitable donations is 75% of net income. Excess charitable donations can be carried forward for five years or transferred to a spouse with an unused donation limit. LEVERAGING A DONATION Leveraging allows you to make a larger donation impact than you could using your own resources solely. Donation leveraging refers to the use of your own cash plus other funds or assets to derive a donation receipt in excess of your cash contribution. A gift in kind with a market value in excess of your cash contribution would be an example. Such gifts in kind could provide donation receipts and therefore tax credits even in excess of your cash contribution thus allowing your donation funds to be employed to your maximum donation level as noted above. INNOVATIVE DONATION LEVERAGING The Vacation Capital tax shelter donation program provides a return of cash of up to 137% of the donor’s cash contribution to their favourite registered charity. Here’s how the program works
INVESTORS or FRIENDS This program appeals to two different groups. INVESTORS – some individuals are simply looking for a means to shelter income or capital gains that have been realized. They may also be looking for a superior investment return. The Vacation Capital tax shelter donation program provides an after tax return of 37% in a period as short as 4 to 6 months. Investors are mostly indifferent as to which charity benefits from their participation. Their primary concern is return on cash.
FRIENDS – other individuals are friends or supporters of particular charities and will participate in order to designate the program benefits to their favourite charity. These individuals may also receive the 37% return or if they are particularly passionate about the work of their charity, they have an additional option. A donor may increase his/her cash contribution by the amount of the investment return of 37% - $2,065 for a one bedroom unit and $3,195 for a two bedroom unit. These additional donation amounts flow directly to the charity immediately. Accordingly, the donor receives a higher donation receipt that generates tax credits equal to an after tax return of 12%. Thus this donor still receives a cash return of 112% of his/her total cash contribution. BENEFITS A designated Charity receives an average benefit of $1,620 to $4,250 from each donation unit in the Vacation Capital tax shelter donation program at no cost to the Donor. Under a normal donation program this same charity benefit would cost the Donor $868 to $2,278 (Calculation: after-tax cost of donating is 53.6% of $1,620 = $868 to 53.6% of $4,250 = $2,278). The Vacation Capital tax shelter donation program allows a Donor to make donations up to the Donor's donation limit at no cash cost apart from a brief opportunity cost before the tax credit is realized. The donor stands to make an after-tax return on their cash contribution of between 12% to 37%. in less than a year. See Timeshare Return Worksheet DALGROVE INC & ASSOCIATES Dalgrove Inc and Associates is an Agent for the Vacation Capital tax shelter donation program. Our mission is to partner with registered charities to maximize their capital and program funding on a continuing basis. Paul Uptigrove CA, MBA, principal of Dalgrove Inc, has had several years of professional experience with an international public accounting firm, extensive executive corporate experience and has served as board member and treasurer of a national charity for over 20 years. Duncan Findlay CA, Associate, has had a strong professional career as an Executive Partner with an international public accounting firm. Duncan has served as auditor, advisor and board member to several charitable organizations. We invite your inquiries. Please address them to: Paul Uptigrove or Duncan Findlay at contact2dalgrove.com (substitute @ for 2) See Frequently Asked Questions As the appraisals of the timeshare units are calculated in $US, the foregoing is the $CDN equivalent using approximately a 1.35 exchange rate. As the dollar fluctuates, so too does the appraisal in Canadian dollars. An exchange rate that is greater than 1.35 at the date of donation increases the return and a lower exchange rate decreases the return.
The identification number issued for this tax shelter shall be included in any income tax return filed by the investor. Issuance of the identification number is for administrative purposes only and does not in any way confirm the entitlement of an investor to claim any tax benefits associated with the tax shelter.
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