Principal Issues: Whether an individual may claim a non-refundable tax credit on their final return for a gift by will, to a U.S. organization.
Position: Pursuant to subsection 118.1(4.1) and (5) a gift by will is deemed to be made by the estate at the time the gift is transferred to the donee. Paragraph 118.1(5.1)(b) applies in particular to a gift made by a graduated rate estate (“GRE”) of an individual if the subject of the gift is property that was acquired by the estate on and as a consequence of the death or is property that was substituted for that property. Pursuant to paragraph (c) of the definition of “total charitable gifts” in subsection 118.1(1), where a gift is made to which subsection 118.1(5.1) applies, the estate will have the flexibility to allocate the donation to any of: (a) the last two taxation years of the deceased individual; (b) the year of the donation or any of the five following years of the estate; or (c) any preceding year of the estate in which it is the individual’s GRE.
Reasons: Legislation and prior views.
