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Certain non-cash gifts and awards may not be taxable, but these administrative policies do not apply if the gift or award is provided to a non-arm's length employee, such as a relative, shareholder, or a person related to them. Gifts and awards to non-arm's length employees will thus be taxable.
- Find out if this guide is for you
- New for 2023
- Table of contents
- Definitions
- Gifts and income tax
- Gifts you can claim
- Gifts in kind
- Capital gains and losses
- Calculating your increased donation limit
Are you an individual planning to give money or other property to a registered charity or other qualified donee? Do you own land or a building, or have stocks or bonds that you would like to give to a registered charity or other qualified donee? Do you own an oil painting, stamp collection, etching, sculpture, antique, or coin set that you would like to give to a gallery or museum that are qualified donees? Are you having your gift appraised? If so, the decisions you make may affect your tax situation.
This guide will provide you with information about making a gift in 2023. If you require information about a gift made in a previous year, you will need a version of this guide for the year in which you made your gift. You can get previous versions of this guide by going to Previous-year forms and publications list or by calling 1-800-959-8281.
The CRA's publications and personalized correspondence are available in braille, large print, e-text, and MP3. For more information, go to Order alternate formats for persons with disabilities or call 1-800-959-8281.
La version française de ce guide est intitulée Les dons et l'impôt.
There are no legislative changes with respect to gifts for 2023.
•Definitions
•Gifts and income tax
•Gifts you can claim
•Gifts to registered charities and other qualified donees
•Gifts to government bodies
•Gifts of ecologically sensitive land
Adjusted cost base (ACB) – This is usually the cost of a property plus any expenses to acquire it, such as commissions and legal fees. It also includes capital expenditures, such as the cost of additions and improvements to the property. You cannot add current expenses, such as maintenance and repair costs, to the cost base of a property. For more information, read Chapter 3 of Guide T4037, Capital Gains.
Advantage – This is generally the total value of any property, service, compensation, use, or any other benefit that you are entitled to as partial consideration for, in gratitude for, or in any other way related to the gift. The advantage may be contingent or receivable in the future, either to you, or a person or partnership not dealing at arm's length with you.
For example, you donate $1,000 to the Anytown Ballet Company, which is a registered charity. In gratitude, the company provides you with three tickets to a show that are valued at $150. You are therefore considered to have received an advantage of $150. The eligible amount of the gift is $850 ($1,000 – $150).
The advantage also includes any limited-recourse debt (including amounts owed by persons not dealing at arm's length with you) in respect of the gift at the time it was made. For example, there may be a limited-recourse debt that can reasonably relate to a gift to a qualified donee as part of a gifting arrangement that is a tax shelter. Generally, a limited-recourse debt is one where the borrower is not at risk for the repayment. In this case, the eligible amount of the gift will be reported in box 13 of Form T5003, Statement of Tax Shelter Information. For more information on tax shelters and gifting arrangements, see Guide T4068, Guide for the Partnership Information Return (T5013 Forms).
Arm's length – This refers to a relationship or a transaction between persons who act in their separate interests. An arm's length transaction is generally a transaction that reflects ordinary commercial dealings between unrelated parties acting in their separate interests.
Eligible amount of the gift – This is the amount by which the fair market value (FMV) of the gifted property exceeds the amount of an advantage, if any, in respect of the gift. There are situations in which the eligible amount may be deemed to be nil. For more information, see Official donation receipts and Deemed fair market value.
If you made a gift of money or other property to a qualified donee (see Gifts to registered charities and other qualified donees), you may be able to claim federal and provincial or territorial non-refundable tax credits when you file your income tax and benefit return, provided that you receive an official donation receipt from the qualified donee. If you lived in Quebec on December 31, claim your provincial tax credit on your Quebec income tax return.
In most cases, a gift is a voluntary transfer of property without valuable consideration. However, a transfer of property for which you received an advantage is still considered a gift for purposes of the Income Tax Act as long as the Canada Revenue Agency (CRA) is satisfied that the transfer of property was made with the intention to make a gift. The fact that you received an advantage will not by itself disqualify the transfer from being a gift when the fair market value (FMV) of the advantage does not exceed 80% of the FMV of the transferred property. For more information, see Income Tax Folio S7-F1-C1, Split-receipting and Deemed Fair Market Value.
Gifts to registered charities and other qualified donees
You can claim a tax credit based on the eligible amount of your gift to a qualified donee. Qualified donees are: registered charities registered journalism organizations (RJO) registered Canadian amateur athletic associations registered national arts service organizations registered housing corporations resident in Canada set up only to provide low-cost housing for the aged registered municipalities in Canada registered municipal or public bodies performing a function of government in Canada the United Nations and its agencies Government of Canada, a province, or a territory universities outside Canada, the student body of which ordinarily includes students from Canada, that are registered with the CRA registered foreign charities to which the Government of Canada has made a gift To further assist donors in determining which organizations may issue official donation receipts, qualified donees must appear on the publicly available lists that the CRA maintains. Go to List of charities and other qualified donees to access these lists. The United Nations and its agencies, as well as the Government of Canada, a province, or territory are not included on these lists because they qualify automatically. Generally, you can claim part or all of the eligible amount of your gifts, up to the limit of 75% of your net income for the year. You may be able to increase this limit if you give capital property (including depreciable property). For more details, see Calculating your increased donation limit. Gifts of non-qualifying securities Special rules apply if you make a gift of a non-qualifying security, such as shares of a corporation you control, or obligations or any other security issued by yourself (other than shares, obligations, and other securities listed on a designated stock exchange and deposits with financial institutions). For more information, see Non-qualifying security or see Guide T4037, Capital Gains. You can also contact the Charities Directorate at 1-800-267-2384. Gifts to U.S. charities Generally, if you have U.S.-source income, you can claim a gift to a U.S. charity if the charity meets the following conditions: it is generally exempt from U.S. tax it could qualify in Canada as a registered charity if it were a resident of Canada and created or established in Canada You can claim the eligible amount of your U.S. gifts up to 75% of the net U.S.-source income you report on your Canadian return. However, you may be able to claim the eligible amount of your gifts to U.S. organizations up to 75% of your net world income. You can do this if the gift would be allowed as a deduction under the United States Internal Revenue Code and you meet all the following conditions: you live near the border in Canada throughout the year you commute to your principal workplace or business in the United States that employment or business was your main source of income for the year Similarly, your claim will also not be restricted to net U.S.-source income if your gift is to a U.S. college or university at which you or a member of your family is or was enrolled in, or if your gift is to a registered U.S. university as referenced in the list of qualified donees.
Gifts to government bodies
You can claim a tax credit based on the eligible amount of gifts to the Government of Canada, a province, a territory, registered municipalities in Canada, or registered municipal or public bodies performing a function of government in Canada. These types of charitable donations do not include contributions to political parties. The amount that qualifies for the tax credit is limited to 75% of your net income. Enter the eligible amount on line 32900 of Schedule 9, Donations and Gifts. Monetary gifts to Canada should be made payable to the Receiver General. Send the gift, along with a note stating that the money is a gift to Canada, to: Place du Portage, Phase III 11 Laurier Street Gatineau QC K1A 0S5 If you made such a gift, you should have been provided with an official donation receipt.
Gifts of ecologically sensitive land
You can claim a tax credit based on the eligible amount of a gift of ecologically sensitive land, including a covenant, an easement, or, in the case of land in Quebec, a real servitude or a personal servitude (the rights to which the land is subject and which has a term of not less than 100 years) you made to any of the following: the Government of Canada, a province, or a territory a municipality in Canada, or a municipal or public body performing a function of government in Canada, that is approved by the Minister of Environment and Climate Change Canada (ECCC) or a person designated by that Minister in respect of the gift a registered charity approved by the Minister of ECCC or the designated person in respect of the gift A gift of ecologically sensitive land cannot be made to a private foundation. The Minister of ECCC, or a person designated by that Minister, has to certify that the land is ecologically sensitive land, the conservation and protection of which is important to the preservation of Canada's environmental heritage. The Minister also will determine the fair market value (FMV) of the gift. For a gift of a servitude, covenant, or easement, the FMV of the gift will be the greater of: the FMV of the gift otherwise determined the amount of the reduction of the land's FMV that resulted from the gift The FMV of the donated property, as determined or redetermined by the Minister of ECCC, will apply for a 24-month period after the last determination or redetermination. If you make a gift of the property within that 24-month period, it is the last determined or redetermined value that you use to calculate the eligible amount of the gift, whether you claim the gift as a gift of ecologically sensitive land or as an ordinary charitable gift. Ecologically sensitive land must be protected and should not be used for other purposes. A tax of 50% of the FMV of the land will be charged to recipients who change the use of the land or dispose of it without the consent of the Minister of ECCC, or a person designated by that Minister. Your claim for a gift of ecologically sensitive land is not limited to a percentage of your net income. For a gift of ecologically sensitive land made before February 11, 2014, any unclaimed portion of the eligible amount of the gift can be carried forward for up to five years. For a gift of ecologically sensitive land made after February 10, 2014, the carry-forward period is 10 years. Enter the eligible amount of the gift of ecologically sensitive land on line 34200 of Schedule 9, Donations and Gifts. See Official donation receipts. You may have a capital gain or loss for the land that you donated. For more information, see the section called Capital gains and losses.
A gift in kind refers to a gift of property (a non-cash gift) such as capital property (including depreciable property) and personal-use property (including listed personal property). These terms are defined in the "Definitions" section in Guide T4037, Capital Gains. A gift in kind does not include a gift of services.
To have a capital gain or loss, the property involved has to be capital property. You will find examples of capital property in the section called Gifts of capital property.
If you donate capital property, you are considered to have disposed of that property. You have to report any resulting capital gain or loss on your return for the year that you donate the property.
You need to know the following three amounts to calculate a capital gain or a capital loss:
•the proceeds of disposition (generally the fair market value of the property at the time of donation)
•the adjusted cost base (ACB) of the property
•the outlays and expenses you incurred when donating the property
If you donate cash or other property to a registered charity or other qualified donee in the year, your total donations limit will generally be 75% of your net income for the year. However, you can increase your total donations limit if you donate capital property in the year. If you received an advantage in respect of the donation of the property, include, in your calculations, only the portion of taxable capital gains and recapture of depreciation that related to the gift portion of your donation.
To do so, complete Chart 1 below, and enter the result on Schedule 9, Donations and Gifts. Your donations limit cannot exceed your net income for the year.
- ccperb@tribunal.gc.ca
- 613-943-8360
- 613-943-8841
- 1-833-254-8944
Other transfers of property. If you give capital property as a gift, you are considered to have sold it at its fair market value (FMV) at the time you give the gift. Include any taxable capital gain or allowable capital loss on your income tax and benefit return for the year that you give the gift.
Jan 23, 2024 · If you receive property as a gift, you are generally considered to have acquired the property at its fair market value (FMV) on the date you received it. Similarly, if you win property in a lottery, you are considered to have acquired this prize at its FMV at the time you won it.
3 days ago · Capital gain = Selling price – ACB. For example, you purchase a cottage for $150,000, pay $15,000 in commission and legal fees, and renovate the property for another $50,000. Then, you sell the ...
May 16, 2024 · Is gifting our property an option? Gifting your cottage to the next generation may be a more tax-efficient option depending on the circumstances. If done before June 25th, the old inclusion rate would still apply.
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Nov 22, 2019 · In the sale of a property that qualifies for the PRE, any capital gain or loss is exempt from income tax claim or deduction. When the PRE Doesn’t Apply. Homes that you own exclusively for rental purposes, at which you do not reside or use for business purposes don’t qualify for the PRE.
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related to: can i use a gift certificate during the annual sale of propertyReceive A Tax Deduction For Appraised Value, Experienced Service. Get Started! Fast & Free Transfer Process. Tax Deductible for Appraised Value. Donate Today!