| December 13, 1990 | |
| SYDNEY DISTRICT OFFICE | HEAD OFFICE |
| Rulings Directorate | |
| S. Short | |
| Attention: Mr. R. Jeffrey | (613) 957-2134 |
| Chief of Enquiries & | |
| Office Examination | 903085 |
SUBJECT: 19(1)
This is in reply to our memoranda dated November 2 and 22, 1990 concerning the gift of Canadian Cultural Property by the above taxpayer in the years 1987 and 1988.
24(1)
Our Comments
In order for a gift of cultural property to be deductible under section 118.1 of the Act, two things are required:
1) the CCPERB must certify that the object meets the criteria set out in paragraphs 23(3)(b) and (c) of the CCEIA, and
2) the donor of the gift must file with his return a receipt issued by the recipient for the fair market value of the gift.
Subsection 118.1(2) provides that a gift cannot be included in the total of cultural gifts if the receipt filed does not contain the prescribed information, which includes the fair market value of the gift.
We have discussed this matter with officials of Returns Processing Division and they have advised us that unless revised receipts are issued by the 24(1) there is no basis to re-open the years in question.
If revised receipts are actually issued, you may wish to forward the file to the Valuations Section in Audit Programs Directorate. As indicated in paragraph 12 of IT-70R3 issued last April (and its predecessor IT-470R2), the gift of an "object" for purposes of the definition of "total cultural gifts" in subsection 118.1(1) of the Act and for excluding the resulting capital gain from income under subparagraph 39(1)(a)(i.1) of the Act must involve the girting and disposition of all interests in the object. It is certainly not clear form the information you provided whether or not 24(1)
We trust that our comments will be of assistance to you.
B.W. DathDirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch