A traditional donation provides 50% in tax credits
Our structure provides 115%
Discover how flow-through shares can maximize your philanthropic impact while optimizing your tax benefits. An innovative approach to making a difference.
Flow-through shares and double deduction, how does it work?
Double deduction tax credit calculation
The only uncertain part of this entire process is the difference in price between the time the donor subscribes to the shares and the time the donation is made to the foundation, namely four months and one day — the mandatory holding period for flow-through shares. However, a new form of private placements has appeared on the markets, allowing donors to no longer be subject to this rule. It is therefore up to the donors to choose whether they wish to take the risk or not.
Let us take the example of a $10,000 investment in the form of flow-through shares followed by a donation of said shares to the Beausoleil Foundation.
Everything You Need to Know
Flow-Through Shares Explained
Legitimacy of the Double Deduction Strategy
For those who might question the legality of this strategy, it’s important to know that, according to Canadian tax law, there are four main categories of tax shelters:
1. RRSPs, RRIFs, LIFs, and LIRAs
2. TFSAs and TFSA-compliant TFSAs
3. Flow-through shares
4. Charitable donations
The Beausoleil Foundation uses only the last two, which have much higher maximum tax deductions than RRSPs or TFSAs. In fact, donors can deduct up to 75% of their taxable income for charitable donations.
Take Advantage of the Double Deduction
To invest in the flow-through shares offered, please contact us at (514) 779-7336 or serge@fondationbeausoleil.org, and we will refer you to our registered representatives. We strive to recommend the best registered representatives to help you choose the most suitable investments, as the Foundation has a vested interest in you purchasing the best possible shares. This is because the Foundation will benefit from a larger donation if the share price increases during the holding period. The Beausoleil Foundation cannot sell these shares directly, as it does not hold a securities broker’s license to do so.
To complete the subscription for flow-through shares and obtain the tax slips for the chosen company, as well as the Beausoleil Foundation’s charitable donation receipt, the donor only needs to fill out one form, and the Foundation will handle everything else. All you will need to do is forward the documents to your accountant.
To proceed, simply click here.
CRA Registration
Before making any donation, donors should always verify the chosen foundation’s compliance and its legitimacy to issue charitable donation receipts. This is of paramount importance. The Beausoleil Foundation takes the initiative by displaying its registration with the CRA.
Tax Credit Receipt
The president of the Beausoleil Foundation himself took advantage of this tax strategy, which yielded him a return of approximately 800% in 2021. He purchased $200,000 worth of shares and transferred them a few months later to a charitable organization at a fair market value (FMV) of $2,139,000. This resulted in a tax credit of approximately $1,140,300 and a capital gains exemption of $516,700, for a total of $1,657,000, on an initial investment of $200,000. A copy of the president’s 2021 notice of assessment is provided below.
For a total income of over $8 billion ($3.962 million in taxable capital gains equals $7.924 million in total capital gains), the total tax would have been zero if the replacement minimum tax had not had a balance of $20,151. As you can see, this strategy is 100% tax-proven and leaves no room for interpretation. However, and this is very important to mention, the Foundation would never guarantee, promise, or even suggest such returns for a current investment, but it demonstrates that the donor can still aspire to a return significantly higher than the 165% expected in the optimistic scenario described above.
Disclaimers
The Foundation has provided these two precautions for you.
1. Ensure that the Foundation in question is indeed registered with the CRA as a charity authorized to issue proper tax receipts. The Beausoleil Foundation is registered under registration number 806052122.
2. Verify the creditworthiness of the company issuing the flow-through shares. This is where the expertise of the Beausoleil Foundation, its president, and its staff becomes crucial.
Indeed, to be eligible for the deduction and tax credits for flow-through shares, the company has very specific obligations (spending the funds exclusively on mineral exploration and not on salaries, rent, or utility bills). Although there haven’t been any truly horrific cases in the last 20 years, there have still been instances where funds were misused, resulting in subscribers having to reinvest their contributions.
This is why the expertise of the Beausoleil Foundation’s representatives is so crucial. Flow-through shares are a relatively unknown field, and one should not venture into it without the necessary knowledge. Indeed, you must understand that the Foundation has every interest in directing you to competent advisors who can guide you in choosing your shares. In fact, if your shares increase in value during the 4-month and 1-day holding period, the Foundation, as the direct beneficiary, will receive a larger donation. As explained previously, you no longer need to worry about:
– the legitimacy of the Beausoleil Foundation; this has been demonstrated previously;
– the legality of the tax strategy (there is no question of tax avoidance).
– Transfer and deposit of said shares into the Foundation’s account (the Foundation handles everything)
– Issuance of tax slips (the issuing company and the Foundation do this automatically).
The Beausoleil Foundation’s Approach
The Beausoleil Foundation prioritizes an approach based on:
– Full compliance with tax regulations
– Compliance with securities regulations
– Genuine market exposure
– Complete transparency
Result:
-No artificial exit mechanisms
-No prior capital reduction
-A structure aligned with existing tax principles
To offer donors an optimized tax return, without compromising compliance
Disclaimer
The Beausoleil Foundation does not provide legal or tax advice. The information presented is general in nature and intended to encourage informed analysis. Each situation must be validated with qualified professionals.
All you have to do is send the slips to your accountant and take advantage of the most attractive tax savings available today. In short: you only have one form to fill out; you pay it forward; you do good in your community; you have peace of mind, and the government pays the entire bill.
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Maximize Your Philanthropic Impact Today
Our team is available to answer all your questions about flow-through share donations and guide you through your philanthropic journey.