Weekly Tax Tips
Pay Amounts Eligible for Deduction or Credit Prior to December 31st
Date: 12 Nov 2010
Many items which are creditable or deductible for tax purposes must be paid by the end of the year. These amounts include alimony and maintenance, child care expenses, investment counsel fees, professional dues, charitable donations, medical expenses and political contributions.
In addition, gifts of certain publicly-traded securities are not subject to capital gains tax. Where certain conditions are met, employees who donate certain securities acquired through a stock option plan to a qualifying charity may deduct a portion of their taxable stock option benefit. Specifically, when combined with the regular stock option deduction of 50%, none of the stock option benefit will be taxed when shares are gifted. An employee may also be allowed to deduct a portion of their stock option benefit if the proceeds from the disposition of the securities acquired through the stock option plan are donated.
For donations made on or after February 26, 2008, the capital gains tax exemption was further extended to capital gains realized on the exchange of certain unlisted securities for publicly-traded securities, when the publicly-traded securities are then donated within 30 days of the exchange.
This tax tip is a publication of BDO Canada LLP on developments in the area of taxation. This material is general in nature and should not be relied upon to replace the requirement for specific professional advice. The information in this tax tip is current as of
12 Nov 2010.
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