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: Does a charity need to reduce gift of property by the fees required to be incurred when the charity later disposes of the property for cash?
Position: referred to Valuations Section
Reasons: Question of fact as to what is involved in valuation of the property
XXXXXXXXXX 980459
C. Tremblay
April 24, 1998
Dear XXXXXXXXXX,
Re: Gifts of property to a Charity
This is in reply to your letter of February 9, 1998 concerning the gifting of property to a charity. You describe a situation where a property is valued at fair market value and gifted at that value to a charity.
Generally a gift of property is disposed of at the fair market value of that property. However, where the fair market value of the property exceeds the adjusted cost base to the individual, Subsection 118.1(6) of the Act allows the donor to designate an amount not greater than the fair market value and not less than the adjusted cost base to the individual of the property at the time of the gift.
Where property is transferred at fair market value, paragraph 6 of Interpretation Bulletin IT- 297R2 states that the fair market value of the property must be determined by a person competent and qualified to evaluate the particular property being transferred by way of gift. The Department is unable to provide or confirm any valuation that can be used in the determination of the fair market value as required by any particular provision in the Act. The Department provides advice on these matters through a Valuations Section located in certain offices in the country. For Belleville, you may address your enquiry to the attention of C. Floccari, Valuations Section, 1730 St. Laurent Blvd., Ottawa, Ontario, K1J 3H7.
We trust our comments will be of assistance to you
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
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