The Benefits Of Charitable Giving At Death

by Tax Guy - Burlington Accountant on April 9, 2009 Print This Post Print This Post

Question: I am single with two daughters I want give X% to my daughters and y% to a Charity. Will the distribution to charity reduce taxes? All my assets are liquid, no property.

If you leave an amount in your will to a registered charity, your final income tax return will be entitled to a tax credit that may be used to reduce the final taxes payable.  The credit at the federal level is 15% of the first $200 and 29% on all amounts over $200.  The provinces have a similar arrangement for provincial taxes.

Normally, a charitable donation may only be deducted up to 75% of the taxpayers net income but in the year of death 100% of the deduction may be used and in some cases carried back to the prior year’s return.

If you are planning on establishing a charitable donation through your estate, I would recommend you discuss your plans with your family and then meet with an accountant and estate lawyer you are comfortable with.

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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