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.
921966
24(1) L. Holloway
(613) 957-2104
Attention: 19(1)
August 28, 1992
Dear Sirs:
Re: Donations to Registered Charities in Consideration for Annuities
This is in reply to your letter of March 9, 1992, addressed to the Charities Division, requesting confirmation of some of the Department's administrative positions regarding donations to registered charities in consideration for annuities.
We confirm that the position taken in our September 8, 1988 letter is still the Department's view with respect to annuities purchased from charitable organizations. We further confirm that, in accordance with paragraph 3 of Interpretation Bulletin IT-111R, where a registered charity purchases an annuity either in the name of a donor or in its own name with a direction to pay in favour of the donor:
- 1. the amount of the gift to the registered charity will equal the amount, if any, by which the amount of the donation exceeds the total of the annuity payments expected to be received by the donor; and
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- 2. no portion of the payments received by the donor under the annuity purchased by the registered charity will be subject to tax."
We trust these comments will be of assistance.
Yours truly,
G. Thornley
for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
cc. Charities Division (file HAU 5464-4; GC 24832)
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© Her Majesty the Queen in Right of Canada, 1992
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© Sa Majesté la Reine du Chef du Canada, 1992
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