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Thread: Gifts in Kind: Tax question

  1. #1
    CaToonie
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    I've looked at a bunch of reputable independent sites as well as the CRA website and I'm still lost.

    So, theoretically, if I was to donate toiletries, hygienic products, school supplies, etc. Would that be tax deductible? If so, does it fall under the "gifts in kind" category or something else?
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    Mastermind Natalka's Avatar
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    Where I live, no places give tax receipts for those types of donations. You would have to check with individual charities.
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  3. #3
    Smart Canuck
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    One way this works is the organisation "buys" the goods from you and then you donate a sum equivalent to what you receive. (cheque swap).

    For gifts in kind you often have to provide proof of what the goods actually cost you. Much trickier.
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    Smart Canuck
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    Quote Originally Posted by Ellen Cardinal View Post
    I've looked at a bunch of reputable independent sites as well as the CRA website and I'm still lost.

    So, theoretically, if I was to donate toiletries, hygienic products, school supplies, etc. Would that be tax deductible? If so, does it fall under the "gifts in kind" category or something else?
    I have never heard of Revenue Canada allowing this.
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  5. #5
    Dancing bean paste bun Ciel's Avatar
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    There was a thread on the forum about this very strategy regarding personal care item donations and someone pointed out how hard it would be to get the amounts proven. One organization she dealt with had a strict policy on how to get items valued for a tax receipt.

    BTW in general, CRA does view gifts in kind as GST eligible.
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  6. #6
    CaToonie
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    Quote Originally Posted by barbis9 View Post
    I have never heard of Revenue Canada allowing this.
    I volunteered at a local organization and I remember two(?) years ago a lady donated several baby baskets and personal baskets that she had created and the staff member in charge gave her a tax receipt. I don't know how they calculated the value of the items but I figured since I am donating I might as well try. If not, it's not a big deal.
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  7. #7
    CaToonie
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    Quote Originally Posted by Ciel View Post
    There was a thread on the forum about this very strategy regarding personal care item donations and someone pointed out how hard it would be to get the amounts proven. One organization she dealt with had a strict policy on how to get items valued for a tax receipt.
    I am a total (organized) pack rat. I have receipts for everything. I usually scan essential receipts and throw away the physical ones at the end of the year. If it is simply a matter of proving the value of the items I can easily do that.

    Quote Originally Posted by Ciel View Post
    BTW in general, CRA does view gifts in kind as GST eligible.
    Sorry? Could you explain a little bit? This year (2015 tax year) is the first time my tax refund has been anything more than a simple job T4 & university slip.
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    Dancing bean paste bun Ciel's Avatar
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    @Ellen Cardinal - sorry, I may have goofed. I recall that when bartering or exchanging services or products in kind (late 90s), there were publications from CRA indicating that each business involved in the exchange were on the hook for submitting the applicable GST amount in to the CRA.
    It's great you have an excellent record system for your receipts! I've noticed that any store receipt that comes off a fast heat printer seems to fade very quickly (if receipt is on a fax type of paper but platen fed printers that have damaged platens also affect printout quality too) so your scanning process is an ideal way to capture information before it fades from sight!
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  9. #9
    Dancing bean paste bun Ciel's Avatar
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    http://www.cra-arc.gc.ca/chrts-gvng/...dntn2-eng.html
    Not helpful.

    For donations of gifts in kind, the qualified donee can issue an official donation
    receipt after the property has been appraised. The receipt should show the FMV
    or deemed FMV of your gift. It will also show the eligible amount of the gift.
    For more information on what must appear on the receipt, go
    to
    www.cra.gc.ca/chrts-gvng/chrts/prtng/rcpts/whtnf-eng.html.
    Page 11 of the PDF, left column.
    http://www.cra-arc.gc.ca/E/pub/tg/p113/p113-15e.pdf
    Seems the donations relate to items/assets that are likely to acquire capital gains at some point.
    So not relevant to your query.
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  10. #10
    CaToonie
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    @Ciel Thanks for all your help. I guess I'm just going to contact a couple of shelters individually to see if this pans out.
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  11. #11
    tightwad and proud of it! brunt's Avatar
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    My opinion, bottom line, realistically speaking, is if the recipient of the donated goods is not willing to give you a charitable tax receipt, no go. So ask them if they would. I would personally guess not, since that opens a whole can of worms for them as they have to be able to justify the amount quoted on a receipt.

    For instance, CRA views second hand clothes as having no value, as in zero. Therefore, no receipt will be issued. But then things like real estate or stocks are no problem. But then, these typically are easy to value.

    You see, things are a bit cloudy in the "used" category. I know that you are considering donating unused items that you have purchased, but CRA may be hesitant to agree that they are valued at the price that you paid.

    There is a lot of possibility for abuse here, so CRA takes a hard line. Consider the possibility that you go to a thrift store, and find a new item for a bargain. You are not able to take this item and then donate it for a deduction of the full in-store price of the item. I know that this is not what you are trying to do, but this is what CRA is trying to fight. Their stand is actually reasonable.

    Just another case of a minority of crooked people messing up things for the majority of honest people.

    Sorry.
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