3 December 1990 Internal T.I. 902909 F - Tax Creditable Donations

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.

December 3, 1990

Dear Sirs:

Re:  Tax Creditable Donations

This is in reply to your letter of September 27, 1990 requesting our views as to whether, for purposes of the Income Tax Act (the Act), there would be a gift of property in the following situation.

24(1)

Specifically, you request confirmation that the individual donors will be eligible to claim a tax credit for their donations under Section 118.1 of the Act or in the case of corporations, under Section 110.1 of the Act. You have further asked us to confirm than it would be in order for your Society to issue the necessary receipts to cover these donations.

Our Comments

As stated in paragraph 3 of Interpretation Bulletin IT-110R2 (Special Release), "A gift, for purposes of sections 110.1 and 118.1 of the Act, is a voluntary transfer of property without valuable consideration". However, if you will refer to the enclosed IT-110R2 you will note in paragraphs 11 to 13 the Department's stated policy where gifts of nominal value are provided to the donors in recognition of their generosity. As sated therein if the gift has no resale value, such inducements are to be ignored, they do not disqualify the gift.

Based on the policy stated in the above referred to bulletin and provided the have only nominal value as referred to in IT-110R2 the 24(1) donations would likely qualify for charitable donation receipts and thus be eligible for tax credits under section 118.1 or 110.1 of the Act, as the case may be. Further, providing the donations meet the other criteria in IT-110R2, we see no problem in the Society issuing the charitable donation receipts in accordance with the provisions of the Act and the Income Tax Regulations.

Please note that the foregoing is only an expression of our opinion and not a ruling as you request. Advance Income Tax Rulings are only given in accordance with the guidelines set out in Information Circular IC 70-6R2. A copy is attached for your records.

For your assistance we are also enclosing the following Interpretation Bulletins:

     IT-297R2 - Gifts in kind to charity and others IT-288R  - Gifts of capital property to a charity and others IT-110R2 - Together with special release thereto - Deductible gifts and official donation receipts

We trust our comments and the enclosed Interpretation Bulletins and Information Circular will prove helpful.

Yours truly,

for DirectorBusiness and General DivisionRulings DirectorateLegislative end IntergovernmentalAffairs Branch