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:
Whether the purchase of kosher-approved food products from various retailers constitutes a charitable donation?
Position TAKEN:
not a charitable donation
Reasons FOR POSITION TAKEN:
It does not constitute an outright gift, nor is it a gift to a registered charity, and official receipts have not been submitted.
5-941850
XXXXXXXXXXC.Chouinard
July 25, 1994
Dear XXXXXXXXXX:
Re: Charitable Donations - Kosher Food Products
We are writing in reply to your letter of June 28, 1994, wherein you claim to be entitled to a deduction in the amount of $200.00 in respect of charitable donations arising from the purchase of kosher food products.
Subsections 118.1(2) and (3) of the Income Tax Act (the "Act") permit a deduction from income, within specified limits, for gifts made to registered charities, if supported by official receipts issued in accordance with the Regulations. As indicated in paragraph 3 of Interpretation Bulletin IT-110R2 (a copy of which is enclosed), a gift is a voluntary transfer of property without valuable consideration. A gift can be said to have been made where all of the following conditions are satisfied:
(a)property (usually cash) is transferred by a donor to a registered charity;
(b)the transfer is voluntary; and
(c)no consideration or benefit accrues to the donor or to anyone designated by the donor as a result of the transfer.
In the situation outlined XXXXXXXXXX with your letter, a gift would not be considered to have been made since none of the above conditions are satisfied. The first condition is not met as the purported donation is made to retailers of kosher-approved food products which are not registered as charities; the second condition is not met as the purported cash donation is part of the cost of the food products and is not made voluntarily; and the third condition is not met as the purported donation is not without consideration since you receive food products in exchange for your donation. Furthermore, according to subsection 118.1(2) of the Act, charitable donations must be supported by official receipts.
Consequently, since the purported donations do not constitute a gift and since you have not submitted receipts in support of your claim for charitable donations, you cannot claim a deduction under subsection 118.1(3) of the Act.
XXXXXXXXXX
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
Policy and Legislation Branch
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