This is the one mechanic on the page that works better in Canada than in the United States. A gift of publicly listed securities in kind to a registered charity takes the capital gains inclusion rate on that gain to zero under s.38(a.1), while the donation receipt is still issued for full fair market value. Sell first and donate the proceeds and you lose it: half the gain becomes taxable.

Done by a corporation rather than personally, it compounds. The entire capital gain is added to the capital dividend account instead of half of it, and the CDA balance can later be paid out to you as a tax-free capital dividend. On a security with a $50,000 fair market value and a $10,000 cost base, a cash sale adds $20,000 to the CDA; an in-kind gift adds $40,000.