Principal Issues: Whether the donation of property by a Canadian resident individual to a U.S. charity constitutes a gift for tax purposes when the donation is required under a distributor arrangement with a U.S. company. Alternatively, whether the cost of the property would qualify for deduction as a general business expense.
Position: In this situation, it is our view that the donation of property by the individual to the U.S. charity would not constitute a gift for tax purposes. However, the cost of the donated property could be considered a general business expense.
Reasons: Common law definition of "gift" requires that the transfer of property be voluntary. Consistent with prior positions.