S11. Can official donation receipts be issued for publicly traded shares or stock options?
Short answerLong answer
It depends who the donor is.
- Yes, if a person who has acquired the shares or stock options donates them to a charity. The charity may issue an official donation receipt for the fair market value of the gift.
- No, if the corporation who issued them donates the shares or stock options.
For purposes of the Income Tax Act, in order to make a gift, there must be an actual transfer of property. Where a corporation issues shares of its capital stock or grants a stock option, there is no transfer of property by the corporation, as the corporate assets have not been reduced as a result. Therefore, there is no “gift.” As a result, the charity should not issue a receipt even though the shares or options will normally have value.
Shares or other types of rights to stock that are not traded on a public Canadian stock exchange are generally excluded from the Income Tax Act provisions that permit receipting of donations of shares or rights to stock.