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.
Principal Issues: Availability of tax relief for gifts in kind
Position: The individual donor may claim a charitable donation tax credit provided an official tax receipt is filed to support the claim.
Reasons: Legislation.
Signed on February 14, 2007
XXXXXXXXXX
Dear XXXXXXXXXX:
Thank you for your letter received on January 23, 2007, concerning the tax relief available for donations of certain objects to a local museum.
A gift for tax purposes includes a gift in kind, which is a gift of property other than cash. An individual who has made a charitable gift to a registered charity or other qualified donee for the purposes of the Income Tax Act may be entitled to claim a non-refundable charitable donation tax credit. The tax credit is calculated based on the eligible amount of the gift to the charity.
A registered charity that accepts a gift in kind can issue a donation receipt that the individual can use to support a claim for a charitable donation tax credit. Provided there is no benefit or advantage to the individual as a result of making the donation, the donation receipt would show the eligible amount to be an amount equal to the fair market value of the donated property at the time that it is donated. Whether or not there is a benefit or advantage in respect of a donation is a question of fact.
Generally, "fair market value" means the highest price, expressed in dollars, that the property would bring if sold in an open market to an independent buyer. A property's fair market value may be more, or less, than the costs incurred to acquire or produce it. The donor and the charity may approach appraisers, dealers, and other people who are knowledgeable about particular objects to get appraisals to establish the fair market value of the property donated.
I am attaching a copy of pamphlet P113, Gifts and Income Tax, which contains additional information on gifts in kind and donation appraisals.
I trust that the information provided is helpful.
Sincerely,
The Honourable Carol Skelton, P.C., M.P.
Attachment
Jenie Leigh
613-952-1505
2007-022260
January 31, 2007
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