| 19(1) | File No. 5-9600 |
| A.W. Larochelle | |
| (613) 957-2140 |
March 23, 1990
19(1)
Re: Donation to a Museum
This is in reply to your letter of February 7, 1990 and further to our telephone conversation of March 14, 1990 in which you ask us to provide you with a ruling with respect to the 24(1) You ask if this gift may be viewed as a "Gift of Cultural Property".
OUR COMMENTS
We enclose for your guidance our pamphlet entitled "Gifts in Kind". If you will refer to pages 3 to 9 the criteria for deducting gifts of cultural property are fully explained.
We would therefore suggest that you discuss your concerns with the 24(1) and explain to them that you desire to have your recent gift considered to be a cultural property donation in accordance with subsection 118.1(1) of the Income Tax Act. If it is possible at this late date to have the Cultural Property Export Review Board approve your gift (as explained in the pamphlet referred to above), the Department will permit your claim for a gift of cultural property as explained in the enclosed Interpretation Bulletin IT-407R2.
The pamphlet and Interpretation Bulletin referred to above are out of date and do not reflect the amendments which took effect for 1988 and later years. The way in which individual taxpayers obtain tax relief for charitable gift and cultural property gifts was changed. These gifts now qualify for tax credits at specified rates and are added to the other non-refundable personal credits to be deducted from taxes payable. The example set out in the second paragraph of your letter reflects the amendment referred for ordinary charitable gifts. The fourth paragraph of your letter indicates that a "Gift of Cultural Property" is deductible in full from net income, however, this is not the case for 1988 and subsequent years. Cultural Property gifts become creditable as mentioned above the same as ordinary gifts to a charity. The only difference is that Cultural Property gifts are not limited to 20% of income.
If you require further assistance with respect to this gift we would suggest you consult with the Vancouver District Taxation Office.
Yours truly,
E.M. Wheeler for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch