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:
Maximum deduction for charitable donations in year of death where more than one return is filed.
Position TAKEN:
Pursuant to 70(2), deceased taxpayer considered another person whose only income for the year is the value of rights or things as shown on the separate return. The balance of his income is reported on the other tax return as if he only had that income for the year. Maximum deduction based on lesser of donation or 1/5 of income as reported on each return.
Reasons FOR POSITION TAKEN:
70(2), 118.1(1), 118.1(3)
October 25, 1994
SUDBURY TAXATION CENTRE HEAD OFFICE
Rulings Directorate
Attention: Jim Warenda (613) 957-8953
Client Services 541 1-4
7-942317
Maximum Deduction for Charitable Donations in the Year of Death Section 70(2) of the Income Tax Act (the "Act")
This is in reply to your Facsimile of September 6, 1994 concerning the above-mentioned subject.
You enquire as to the maximum deduction for charitable donations in the year of death where a separate income tax return is filed pursuant to subsection 70(2) of the Act.
You indicate that various sources give different answers to this question. You mention that one alternative is that the maximum deduction available on any of the returns filed is calculated on the lesser of the amount of donations and 20% of net income for the year as reported on all returns. You have asked us to clarify the situation and have given an example to illustrate the problem.
Pursuant to subsection 70(2) of the Act, the deceased taxpayer is considered to be another person, whose only income for the year is the value of rights or things as shown on the separate return. As a consequence, the balance of the deceased taxpayer's income is shown in the other tax return as if he was a different taxpayer having only that income for the year.
As per subsection 118.1(1) of the Act, "total gifts" mean, among others, the lesser of the individual's charitable donations for the year and 1/5 of the individual's income for the year. Therefore, in your example, the maximum amount of charitable donations used to calculate the tax deduction in each return will be limited to $8,000 and $2,000 respectively.
Chief
Financing, Leasing and Deferred Income
Plans Section
Financial Industries Division
Rulings Directorate
Policy and Legislation Branch
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