Deduction for charitable donation of securities

Donation of securities – Paragraph 110(1)(d.01)

If the employee acquires a security under an option and donates it to a qualified donee, the employee will be entitled to a deduction under paragraph 110(1)(d.01) of the Income Tax Act in addition to the option share deduction. In general, the deduction is equal to one-half of the security option benefit and is applied on the lesser of:

The employee can claim this additional deduction if the following conditions are met:

Under subsection 110(2.1), a deduction under paragraph 110(1)(d.01) may also be available where an employee, in exercising an option, directs the appointed or approved broker or dealer to immediately sell the security and donate all or part of the proceeds of the disposition to a qualified charity. The amount of the deduction must be prorated to reflect the portion of the proceeds that are donated.

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