CRA has stated that a donation tax credit can be claimed on the deceased taxpayer’s final return so long as the registered charity receives a letter from the estate advising of the gift and its value and the registered charity issues a letter to the estate acknowledging the gift and stating that it will accept the gift. Does this longstanding administrative practice continue to apply to gifts made by an estate that arose after 2015 so that a donation tax credit can be claimed on the deceased individual’s final tax return at a time before the property is actually transferred to a qualified donee?
Where the gift (whose amount is known) cannot be completed within the 60-month period (for example, because of litigation) would the CRA’s administrative practice be available to allow a gift to be made beyond the 60-month period such that it would be considered to meet the conditions in s. 118.1(5.1) with regards to the timing of the gift? CRA responded:
The CRA is currently reviewing the administrative practice with respect to the timing of donation claims with respect to the eligible amount of gifts made by GREs or former GREs and claimed on a deceased individual’s final T1 return.
Any such administrative relief will not extend to gifts of property transferred to qualified donees more than 60 months after the individual’s death since these gifts do not meet the conditions of subsection 118.1(5.1). Accordingly, such gifts cannot be claimed on the tax return of the individual for the year of death. Property that is subject of a gift that is transferred to the donee more than 60 months after the date of death can be claimed by the estate in the year the gift is made or in any of the five subsequent years.