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: Whether a taxpayer can claim charitable donations in a specific situation.
Position: Question of fact but no based on the information provided.
Reasons: A settlement of debt by a debtor is not a charitable donation
XXXXXXXXXX 2000-006054
Michel Lambert
Attention: XXXXXXXXXX
December 14, 2000
Dears Sir\Madam:
Re: Charitable Donations
This is in reply to your letter of May 8, 2000 which was forwarded to us for reply by the Ottawa Tax Services Office. You have requested our views on whether your client can use charitable donation receipts issued by the XXXXXXXXXX.
A gift is a voluntary transfer of real or personal property from a donor, who must freely dispose of his or her property, to a donee, who receives the property given. The transaction may not result directly or indirectly in a right, privilege, material benefit or advantage to the donor or to a person designated by the donor. To qualify, the donation must be in the form of an outright gift. Any legal obligation on the payor would cause the transfer to lose its status as a gift. Further, in order for an expenditure to be considered a gift, it must be made without conditions, from detached and disinterested generosity, out of affection, respect, or charity or like impulses, and not from the constraining forces of any moral or legal duty. The donee must have an unfettered right to use a donation as it wishes.
It is a question of fact whether or not a gift has been made for income tax purposes. However we are of the opinion that a settlement of a debt by a debtor is not a charitable donation.
We are sending back your copies of the charitable donation receipts.
We hope that our comments are of assistance.
Acting Manager
Financing, Leasing and Plans Section
Financial industries Division
Income Tax Rulings Directorate
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