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Charitable Donations
(12) The amount chosen in respect of the donation cannot be greater than the fair market value
of the property and not less than the greater of the property’s adjusted cost base and
the benefit received as a result of having made the donation. This chosen amount should
be used to calculate any taxable capital gain or recapture, as well as the donation credit.
Generally, this will result in up to 100% of any taxable capital gain or recapture created
from the donation of the property being sheltered by the donation credit.
(13) Donations made in both the year of death and under the individual’s will can be claimed
in the year of death and, if necessary, carried back to the preceding year. The 100% net
income limitation applies to both the year of death and the preceding year. In the year of
death, an individual can claim the lower of 100% of net income, or the eligible amount of
the gifts created in the year of death, plus the unclaimed portion of gifts made in the five
years before the year of death. The donation credit may also be claimed on donations of
registered retirement savings plans, registered retirement income funds, tax-free savings
accounts and life insurance proceeds made by direct beneficiary designations on death.
(14) Corporations receive a deduction in calculating taxable income for donations made in the
year or in the previous five years, although unused deductions cannot generally be claimed
after an acquisition of control. The net income limits and the capital gain inclusion rates
for corporations are the same as those applicable to individuals except that gifts made to
certain Crown agencies and foundations are entitled to a donation deduction of up to 100%
of net income.
For Québec purposes, the carryforward period for donations made by corporations is 20
years.
© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Current as of May 3, 2013