6.Donations of Flow-thru Shares (“FTS”)
•Currently, the combined effect of the
deduction of the “flow-thru” expenses,
the elimination of the capital gains tax,
and the charitable donation deduction or credit
substantially reduces or virtually eliminates the after-tax cost of making a charitable donation of FTS
•The Budget proposes to limit the
availability of the exemption from tax on
capital gains where FTS are donated to a
qualified donee to the extent that the cumulative
capital gains in respect of the gift exceeds the original cost of the FTS
•The proposed rules apply where a
taxpayer acquires shares issued pursuant
to a FTS agreement entered into on or
after March 22, 2011
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