What gifts can you claim?

The Canada Revenue Agency says...

Gifts and Income Tax Guide (P113)

Gifts to registered charities and other qualified donees

You can claim a tax credit based on the eligible amount of the gift you give to a qualified donee.

A qualified donee generally includes the following:
  1. registered charities;
  2. registered Canadian amateur athletic associations;
  3. registered national arts service organizations;
  4. housing corporations in Canada set up only to provide low-cost housing for the aged;
  5. municipalities in Canada,
  6. under proposed changes, municipal or public bodies performing a function of government in Canada;
  7. the United Nations and its agencies;
  8. universities outside Canada with a student body that ordinarily includes students from Canada provided these universities are listed in Schedule VIII of the Income Tax Regulations;
  9. charitable organizations outside Canada to which the Government of Canada has made a gift either during the donor’s tax year, or in the 12 months just before that period (or, under proposed changes, effective on the later of January 1, 2012, and the date the legislation receives Royal Assent, during the 36 month period beginning 24 months before the time of the donor’s gift); and
  10. the Government of Canada, a province, or a territory.

Under proposed changes, effective on the later of January 1, 2012, and the date the legislation receives Royal Assent, qualified donees of the types listed in numbers 4, 5, 6, 8, and 9 above, are required to register with us in order to be included on a publicly available list that we maintain. This will further assist donors in determining which organizations may issue official donation receipts.

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. If you give capital property (including depreciable property), you may be able to increase this limit. For details, see Calculating your increased donation limit.

Non-qualifying gifts

Non-qualifying gifts
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 details, including information about proposed changes, go to www.cra.gc.ca/gncy/bdgt/2011 or see Guide T4037, Capital Gains.

Gifts to U.S. charities

Gifts to U.S. charities
Generally, if you have U.S. income, you can claim any gifts to U.S. charities that would be allowed on a U.S. return. You can claim the eligible amount of your U.S. gifts up to 75% of the net U.S. income you report on your Canadian return. However, you may be able to claim the eligible amount of your gifts to certain U.S. organizations up to 75% of your net world income. You can do this if you live near the border in Canada throughout the year and commute to your principal workplace or business in the United States, and if 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. 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 or if your gift is to a prescribed university as referenced in the list of qualified donees above.

You can claim a tax credit based on the eligible amount of gifts to the Government of Canada, a province, or a territory. Government gifts 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 2 of Schedule 9, Donations and Gifts.

Gifts to Canada include monetary gifts made directly to help reduce Canada’s debt. If you made such a gift, which will be used only to service the public debt, you should have been provided with a tax receipt for the gift.

To make such a gift, which should be made payable to the Receiver General, send it, along with a note asking that we apply it for this purpose, to: Place du Portage, Phase III, 11 Laurier Street, Gatineau QC K1A 0S5.

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) you made to Canada, or one of its provinces, territories, or municipalities, or a registered charity approved by the Minister of the Environment.

Under proposed changes, gifts of ecologically sensitive land made to a municipal or public body performing a function of government in Canada, will also qualify for a tax credit.

The Minister of the Environment, or a person designated by that minister, has to certify that the land is important to the preservation of Canada’s environmental heritage. The Minister will also determine the fair market value (FMV) of the gift.

For a gift of a covenant or an easement, or a real servitude (in Quebec), the FMV of the gift will be the greater of:
  • the FMV of the gift otherwise determined; and
  • 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 the Environment, 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.

Your claim for a gift of ecologically sensitive land is not limited to a percentage of your net income.

The Minister of the Environment (or if the land is located in Quebec, the ministère du Développement durable, de l’Environnement et des Parcs) will issue you a certificate indicating the FMV of the gifted property and that the property is important to the preservation of Canada’s environmental heritage. Attach this certificate to your income tax and benefit return. Enter the eligible amount of the gift of ecologically sensitive land on line 342 of Schedule 9, Donations and Gifts.

You may have a capital gain or loss for the land that you donated. For information, see Capital gains and losses.

Gifts of certified cultural property

Special incentives have been put in place to encourage Canadians to keep in Canada cultural property that is of outstanding significance and national importance. Under the Cultural Property Export and Import Act, people can donate this type of property to Canadian institutions and public authorities that have been designated by the Minister of Canadian Heritage.

You can claim a tax credit based on the eligible amount of gifts of certified cultural property. The eligible amount of your gift is calculated based on the fair market value (FMV) of the property, on the date you legally transferred ownership to the designated institution or public authority, as determined by the Canadian Cultural Property Export Review Board (CCPERB).

The FMV of the donated property, as determined or redetermined by the CCPERB, 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 re-determined FMV that you use to calculate the eligible amount of the gift, whether you claim the gift as a gift of cultural property or as an ordinary charitable gift.

Your claim for a gift of certified cultural property is not limited to a percentage of your net income.

If you donate cultural property, certified by the CCPERB, to a designated institution or a public authority, the CCPERB will issue you Form T871, Cultural Property Income Tax Certificate, indicating the FMV of the gifted property. Attach this certificate to your income tax and benefit return. Enter the eligible amount of the gift of certified cultural property on line 342 of Schedule 9, Donations and Gifts.

You do not have to report, or pay tax on, any capital gain that you realize when you donate certified cultural property to a designated institution or a public authority. You can, however, deduct capital losses within specified limits. For more information, see Guide T4037, Capital Gains.

Carrying forward tax credits

Carrying forward tax credits

You do not have to claim, on your income tax and benefit return for the current year, the eligible amount of gifts you made in the year. It may be more beneficial for you to carry them forward and claim them on your return for any of the next five years. No matter when you claim them, you can claim them only once.

You have to claim tax credits for gifts you carried forward from a previous year before you claim tax credits for gifts you give in the current year. If you are claiming a carryforward, attach a note to your return indicating the year of the return with which you submitted the receipt, the portion of the eligible amount you are claiming this year, and the amount you are carrying forward.

Usually, you can claim gifts on the return you receive. However, you have to use a T1 General Income Tax and Benefit Return if you are claiming:
  • gifts of certified cultural property;
  • gifts of ecologically sensitive land; or
  • most gifts in kind (see Gifts in kind for details.

Gifts in the year of death

Gifts in the year of death

If you are preparing an income tax and benefit return for a deceased person, you can claim the eligible amount of gifts that the person gave in the year of death including those that the person bequeathed in the will. The amount claimed must be the lesser of:
  • 100% of the deceased person's net income; and
  • under proposed changes, the eligible amount of the gift(s) donated in the year of death (including gifts by will), plus the unclaimed portion of the eligible amount of any gifts made in the five years before the year of death.

Any excess can be claimed on the return for the previous year (up to 100% of the deceased's net income for that year).

You may claim a charitable donation tax credit on the deceased person's return for a donation of a direct distribution of proceeds to a qualified donee who is the designated beneficiary of a registered retirement savings plan (RRSP) (including a group RRSP), a registered retirement income fund (RRIF), a tax-free savings account (TFSA), or life insurance policy (including a group life insurance policy). This does not apply if the qualified donee is a policyholder under the life insurance policy or is the assignee of the life insurance policy.

You have to attach official tax receipts and other required forms to the return on which you are claiming the gifts. However, there are exceptions to this rule. For more information, get the CRA guide T4011, Preparing Returns for Deceased Persons.