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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
1.Whether a registered charity can issue receipts on behalf of another organization.
2.Whether a housing corporation within the meaning of paragraph 149(1)(i) of the Act can issue receipts for donations.
Position TAKEN:
1.A registered charity can only issue receipts in respect of gifts which it has itself received.
2.Gifts to a housing corporation exempt from tax under paragraph 149(1)(i) of the Act are considered to be charitable gifts for which receipts can be issued.
Reasons FOR POSITION TAKEN:
E9303786, E9126535
7-941446
XXXXXXXXXX C. Chouinard
Attention: XXXXXXXXXX
July 11, 1994
Dear Sir:
Re: Charitable Donations
We are writing in reply to your letter of April 11, 1994 addressed to the Regional Office that was referred to us for reply.
You have requested comments on the ability of a registered charity and a housing corporation to issue receipts for income tax purposes.
Your request for a technical interpretation appears to relate to a situation which arose in respect of a specific taxpayer. As indicated in paragraph 21 of Information Circular 70-6R2 dated September 28, 1990, a request for a written opinion on a completed transaction is generally considered by the taxpayer's local district office. Therefore, while we are unable to provide an opinion in respect of the situation outlined in your letter, we are prepared to offer the following general comments.
In respect of your first question, paragraph 3 of Interpretation Bulletin IT-110R2 (a copy of which is enclosed) states that three conditions must be present in order for a donation to be eligible for a credit or deduction, as the case may be, against income. One of these conditions requires that property, usually cash, be transferred by a donor to a registered charity. Therefore, since the XXXXXXXXXX is a registered charity, it can issue receipts for donations it receives to the extent they meet all of the requirements set out in paragraph 3 of IT-110R2. The XXXXXXXXXX cannot, however, issue receipts for donations made to the XXXXXXXXXX since such donations would not be considered a gift to the XXXXXXXXXX.
As regards your second question, gifts to a housing corporation exempt from tax under paragraph 149(1)(i) of the Income Tax Act (the "Act") are considered to be charitable gifts for which receipts can be issued. In order for a corporation to qualify under paragraph 149(1)(i) of the Act, the following conditions must be met:
(i) it must be constituted exclusively for the purpose of providing low-cost housing accommodation for the aged; and
(ii) no part of the income of the corporation can be payable to, or otherwise made available for the personal benefit of, any proprietor, member or shareholder thereof.
XXXXXXXXXX
Since the Constitution authorizes the XXXXXXXXXX to provide accommodation to persons other than the aged, the second condition mentioned above is not met. Paragraph 149(1)(i) of the Act requires that the corporation be constituted exclusively, not primarily, for the purpose of providing housing to the aged. If the Constitution does not reflect the true purpose of the XXXXXXXXXX it should be revised.
We also note that XXXXXXXXXX Constitution does not indicate that the housing accommodation provided will be "low-cost housing accommodation". The fact that the corporation operates on a non-profit basis and that it provides accommodations primarily to persons of low or modest income does not necessarily mean that the cost of such accommodation will be low. The phrase "low-cost housing accommodation" has been interpreted to include comfortable but modest rental accommodation at rent levels which are low relative to rent levels generally available for similar accommodations (other than subsidized or non-profit accommodations) in the same community. You may want to clarify XXXXXXXXXX Constitution if its purpose is, in fact, to provide low-cost housing accommodation.
Unless as otherwise stated, all references to statute are to the Income Tax Act, S.C. 1970-71-72, c.63, as amended and consolidated to June 10, 1993.
We trust that these comments will be of assistance.
Yours truly,
A.M. Brake
for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
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