Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Can a bond issued by a charitable organization to an RRSP be forgiven and the charitable donation tax credit claimed by the annuitant?
Position: No.
Reasons: It would be the RRSP that has made the donation, not the annuitant. The tax credit would only be available to the RRSP. Also, the annuitant may be subject to an income inclusion under subsection 146(9).
XXXXXXXXXX 2000-003726
G. Kauppinen
October 20, 2000
Dear XXXXXXXXXX :
Re: Gift to Charity by Registered Retirement Savings Plan ("RRSP")
This is in reply to your letter dated July 6, 2000 wherein you requested our opinion on the above-noted subject.
You advise us that your RRSP currently holds as an investment a $5000 bond bearing 6% interest per annum issued by a charitable organization.
You inquire whether you could claim a tax credit for a charitable donation on your personal T1 income tax return if your RRSP did not require repayment of the interest and principal payable by the charity at the time the bond matures.
The answer is no. In this situation it would be your RRSP that has made the charitable donation, not you personally. Any tax credit with respect to the donation would only be available to your RRSP (which is generally tax-exempt on its income).
You should also be aware that subsection 146(9) of the Income Tax Act may require you, as the annuitant of the RRSP, to include in computing your income for tax purposes the total amount of interest and principal forgiven by the RRSP.
We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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