28 November 2010 CTF Roundtable, 2010-0389111C6 - Leveraged Donation Arrangements -- summary under Total Charitable Gifts

CRA will generally not consider advance ruling requests for leveraged donation schemes such as the one considered in Maréchaux. CRA listed conditions under which it would refuse to make a ruling. In addition to five factors present in a Maréchaux-style scheme (essentially amounting to leveraging a donation with "borrowed" funds that do not represent a genuine economic burden on the donor or gain to the charity), the list included:

  • The funds loaned to the taxpayer circle back to the lender.
  • The use of a limited partnership or other structure permits losses or other deductions to flow through to investors.
  • Offshore money managers or investment accounts are used.
  • There is uncertainty about certain aspects such as valuation and questions of fact such as arm's-length issues.
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