4.Gifts of Non-qualifying Securities (NQS)
A NQS is generally a share, debt
obligation, or other security (but not
publicly listed securities and deposit obligations
of financial institutions) of a corporation that is not at arms length to the donor
NQS rules currently apply to donations
to private foundations and charities not at
arms length to donor
Budget extends rules to gifts of NQS to
all registered charities and to defer
tax recognition until the recipient charity
disposes of the NQS to a third party for consideration.
If the NQS is not disposed of by the charity
within the five-year period following the date of the gift, there will be no tax recognition of the gift
Budget also proposed new anti-avoidance rules
Effective for securities disposed of by
donees on or after the March 22,
2011
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