Planned Giving and Canadian Charities
March 11, 2015
CRA recently released a letter which discusses whether a gift by will of marketable securities provided to a Foundation would be deemed to have been made immediately before the death of the donor. CRA concluded that the gift did constitute a gift by will made immediately before the death of the donor under subsection 118.1 (5) of the ITA. The letter appears to have been written before the 2014 budget, which will have an impact on the bequests are dealt with in estates where the testator died on or after January 1, 2016.
March 09, 2015
Properly issuing official donation receipts has been challenging for many registered charities. According to the CRA, 89% of registered charities that are audited are not correctly issuing official donation receipts. Issuing incorrect receipts can result in revocation or penalties. It is easier to do it right than fix problems later! Here is a new half-day program from Blumbergs entitled "Fundamentals of Receipting by Canadian Charities".
February 21, 2015
The British Columbia Supreme Court recently released a decision, Re Mulgrave School Foundation, which discusses charitable gifts that are made for a specific charitable purpose and whether it is possible to change that purpose. Unfortunately, in this case the donors and schools had restricted their gift to be an endowment for scholarships and they did not have in the agreement a power to amend the restrictions.
February 13, 2015
CRA recently released a letter with respect to spousal sharing of charitable gifts that was written to David Sherman, one of Canada's top tax lawyers. As a result of recent legislative amendments in Bill C-43 which received Royal Assent on December 16, 2014, CRA has changed their administrative practice with respect to spousal sharing of charitable gifts with respect to deaths occurring after 2015 (i.e. in 2016 or later). Bill C-43 included amendments affecting how will and certain designated gifts will be treated for tax purposes for gifts occurring after 2015 and according to CRA this necessitated the change. The legislative changes affect the taxation of gifts made by will - in some case they will provide greater flexibility but in other cases or situations they may deny certain tax benefits.
December 01, 2014
Mark Blumberg will be speaking on "Planned Giving and the Elderly Client" conference on January 23, 2015
November 26, 2014
The CBC has disclosed that CRA had provided them with a list of private information on taxpayers who had applied for certain tax benefits as a result of donating cultural property through the Cultural Property Export Review Board. Disclosure of confidential taxpayer information is a serious issue and CRA has released a statement apologizing for the laps and confirming that the CRA will contact each of the taxpayers who were affected. This disclosure appears to be accidental and a mistake on CRA's part.
September 01, 2014
Following up on the 2014 Budget, Finance has released draft tax legislation for consultation. The changes with respect to bequests to registered charities are from Budget 2014, and will allow some greater flexibility for claiming the charitable donations against either the estate or a trust. This bequest proposal has generally been welcomed. It will deal with some situations were there is a mismatch between the income a deceased person or their estate has and the amount of gift left to charity.
March 21, 2014
The CRA recently released a letter which discusses whether a taxpayer's estate was entitled to donation tax credits claimed for a charitable gift made by an individual in her secondary will. The use of a Primary and Secondary Will may be for a number of reasons, although typically in Ontario the assets that don't require probate are placed in a different will to those assets that do require probate. In this way some of the probate tax can be avoided. The letter discusses various issues such as whether the trustees had the discretion to make a gift to a Charity and the factors considered when determining whether a donation to a charity has been made by a taxpayer in their will.
February 10, 2014
Today Finance Minister Jim Flaherty introduced the Canadian Federal Budget 2014. The budget had a large number of provisions dealing with non-profits and charities. Here are some excerpts from the Federal Budget in one PDF document. Overall I was very pleased with the provisions of the budget dealing with charities.
January 27, 2014
The Globe and Mail recently had an article which discusses the concept of perpetual endowments as well as the use of donor advised funds and bequests. Read article >
July 04, 2013
In this article I discuss the importance of Canadian charities involving professional advisors in their planned giving efforts.
July 04, 2013
In this article I provide some suggestions to charities in Canada as to how they can easily start a planned giving program for their charity.
July 04, 2013
In this article I discuss different planned giving vehicles in Canada.
June 14, 2013
The CRA has just released its new process for recognizing “municipal or public bodies performing a function of government in Canada”. Here is a PDF OF THE ARTICLE This will be of particular interest to Aboriginal bands, school boards and others who may wish to obtain this recognition as it makes them a qualified donee and therefore able to issue official donation receipts and also more easily receive funds from other Canadian charities. We hope that this new process will facilitate philanthropy in the Aboriginal space. There are probably over a thousand organizations that could one day be listed on the CRA website, which will make donations to them far simpler and easier. It is important to note that as of January 1, 2014 for a group to be recognized under the category “municipal or public bodies performing a function of government in Canada” it cannot self-assess but must be on the list. Some organizations will want to proceed quickly with the process as CRA has not set out a service standard yet and therefore it is difficult to know how long the process will take. It is also interesting to note that “...organizations that apply before January 1, 2014, and that can show that they met the requirements to be a municipal or public body performing a function of government in Canada as of January 1, 2012, will be given qualified donee status retroactive to that date.” Although a lawyer is not required to send the letter to CRA some organizations may wish to retain legal counsel to assist with this and other matters such as appropriate issuance of receipts and required books and records.
March 10, 2013
On June 5, 2013, Trevor Clark and myself will be delivering the “Planned Giving Institute” for AFP Toronto’s Fundraising Day.
February 11, 2013
Today the House of Commons Standing Committee on Finance (FINA) released its much anticipated report on Tax Incentives for Charitable Giving in Canada. The report discuss “Charitable Donations and Donors in Canada”, “The Regulation of Charities”, “Tax Incentives and their Estimated Federal Fiscal Cost” as well as specific proposals such as Charitable Donations Tax Credit Thresholds and Rates and Donations of Real Property and Shares of Private and Public Corporations. There is also discussions of bequests and tax fairness as well transparency and accountability of charities.
September 03, 2012
The CRA recently sent a letter discussing the tax implications of a donor making a gift of a newly acquired life insurance policy to a registered charity.
August 13, 2012
Here is a CRA letter which discusses the dates and value to be used on official donation receipts for a bequest under will.
April 04, 2011
I will be co-presenting for Canadian Association of Gift Planners Greater Toronto Area RoundTable on June 13th at 1:30 – 3:00 p.m. on “You Don’t Need to be Rich to be a Philanthropist: Making an impact with your charitable giving” at the Toronto Reference Library.
December 21, 2010
Here is a copy of the Blumbergs’ Canadian Charity Law List for December 2010.
December 13, 2010
Here is a recent CRA letter dealing with “If, as a consequence of a gift, a charity holds a beneficial interest in an alter ego trust, will the restriction in subsection 118.1(13) apply in respect of the gift?”
September 21, 2010
This CRA letter deals with “Whether, in a subsequent year, a taxpayer can claim charitable donations previously reported and carried forward on a spouse or common law partner’s personal tax return.” CRA’s position is yes. “REASONS: The CRA’s administrative practice allows a taxpayer to initially choose which spouse or common law partner will report a donation or gift and allows for the subsequent transfer of any carryforward balances from one to the other.” Here is the full letter from CRA.
July 12, 2010
In this letter CRA discusses “Whether the adjusted cost basis is a reasonable proxy for “cost” of an interest in a life insurance policy in applying the deeming provisions of 248(35) with respect to a gift to a qualified donee in certain circumstances.”
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