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 dedication of XXXXXXXXXX to City considered a gift.
Position:
No.
Reasons:
Conditions described in paragraph 3 of IT-110R2 are not met.
951981
XXXXXXXXXX Wm. P. Guglich
Attention: XXXXXXXXXX
January 8, 1996
Dear Sirs:
Re: Dedicating XXXXXXXXXX
This is in reply to your letter of July 14, 1995 wherein you requested our views as to whether the City of XXXXXXXXXX (the "City") may issue charitable donation receipts to developers and individuals when they dedicate XXXXXXXXXX to the City. We apologize for the delay in responding to your inquiry.
OUR VIEWS:
Charitable donation receipts may only be issued by the City for donations of property received which qualify as a gift.
A gift for purposes of sections 110.1 and 118.1 of the Income Tax Act (the "Act") is a voluntary transfer of property without valuable consideration. In order for dedications to the City of XXXXXXXXXX to qualify as gifts to the City, the following conditions as described in paragraph 3 of Interpretation Bulletin IT-110R2 must be met:
(a)Beneficial ownership of the XXXXXXXXXX or an interest therein must be transferred to the City.
(b)The transfer must be voluntary. Any legal obligation on the donor would cause the transfer to lose its status as a gift.
(c)The transfer must be without expectation of return. No valuable consideration or any benefit of any kind to the donor or to anyone designated by the donor may result from the transfer.
It is our view that the dedication of the XXXXXXXXXX would not qualify as a gift to the City for the following reasons:
(i) It is uncertain whether beneficial ownership of any property is transferred to the City.
(ii) The City requires the dedication of the XXXXXXXXXX and therefore the transfer would not be voluntary.
(iii) There is an expectation of return by the developers.
Where a gift is received the fair market value, as of the date beneficial ownership is transferred, must be recorded by the donee on the receipt for tax purposes. As stated in paragraph 6 of IT- 297R2, the fair market value must be determined by a person competent and qualified to evaluate the particular property.
For your information we are forwarding Interpretation Bulletins IT-110R2 and IT-297R2.
We trust our comments will be of assistance to you.
Yours truly,
R. Albert
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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