Eligible amount of cultural and ecological gifts

What’s in this article?

 

What is this?

Cultural gifts: If you donate cultural property to institutions or public authorities designated by the Minister of Canadian Heritage, you are eligible for this tax credit. Any taxable gains realized by your gift are tax exempt, and any capital losses are deducted within your normal taxation limits.

Ecological gifts: If you own ecologically sensitive land, and you choose to donate it to qualified donees (other than a private foundation), you are eligible for this tax credit. There are several tax benefits available under this donation, including:

    • A tax deduction for the value of your gift (a tax rate of 15% applies to the first $200 of your donation, and a tax rate of 29% applies to the remaining value of your donation)
    • Your capital gains reduced to zero

 

 

Am I eligible?

Cultural gifts: You can claim a tax credit based on the eligible amount of your gift of certified cultural property. The eligible amount of your gift is calculated based on the Fair Market Value (FMV) of the property, as determined by the Canadian Cultural Property Export Review Board (CCPERB).

Canada Revenue Agency (CRA) says ….

You do not have to report a capital gain when you sell or donate certified Canadian cultural property (national treasures) to an institution or public authority designated by the Minister of Canadian Heritage. The Canadian Cultural Property Export Review board certifies this property as cultural property and will give you a certificate for tax purposes. Cultural property can include paintings, sculptures, books, manuscripts, or other objects.

If you sell or donate certified cultural property to a designated institution, you may have a capital loss. The tax treatment of the loss will depend on what type of property you sold or donated. For example, the certified cultural property may be listed personal. If this is the case, the rules for listed personal property losses will apply.

For donations of certified cultural property made after February 10, 2014, special rules will apply when the property was acquired through a gifting arrangement that is a tax shelter

 

Ecological gifts: You can claim a tax credit based on the eligible amount of your gift of ecologically sensitive land (including a covenant, an easement, or, in the case of land in Québec, a real servitude).

Canada Revenue Agency (CRA) says ….

Gifts of ecologically sensitive land made to a municipal or public body performing a function of government in Canada, 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
  • 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 carry-forward period for gifts of ecologically sensitive land made after February 10, 2014, has been extended to 10 years.

 

Revenu Québec says….

If you donated a building situated in Québec that can house artist studios or one or more cultural organizations, the eligible amount of the gift can be increased by 25%, provided both of the following conditions are met:

  • The Ministère de la Culture et des Communications issued you a qualification certificate for the building, along with a certificate confirming its fair market value based not only on the value of the building itself, but also on that of the land on which it is located.
  • The gift was made to one of the following donees:
    • a Québec municipality or a municipal or public body performing a function of government in Québec
    • a registered charity operating in Québec for the benefit of the community, such as the Société d'habitation et de développement de Montréal, or operating in the arts or culture sector
    • a registered cultural or communications organization
    • a registered museum

If both conditions are met, enter the eligible amount of the gift on line 12 of Schedule V (to determine the eligible amount, you must use the fair market value shown on the certificate issued by the Ministère de la Culture et des Communications); otherwise, enter the eligible amount of the gift on one of lines 1 through 3 of Schedule V, depending on the particular donee.

 

Where do I claim this?

Follow these steps in H&R Block’s tax software to file your 2015 taxes:

  1. Click the PREPARE tab.
  2. Click the OTHER icon. You will find yourself here:
  3. Under the CHARITABLE & POLITICAL CONTRIBUTIONS section, select the checkbox labelled Donations and gifts (Schedule 9).
    4. Scroll to the bottom of the page and click Continue.

When you arrive at the page for Donations and gifts (Schedule 9), enter your information into the tax software.

Note: Be sure to select Cultural or ecological gift (eligible amount only) from the list under Type of donation or gift.

 

Where can I learn more?