| 922587 | |
| Glen Thornley | |
| (613) 957-2101 |
24(1)
Attention: 19(1)
September 9, 1992
Dear Sirs:
Re: Charitable Donations
This is in reply to your letter of August 20, 1992 requesting an advance income tax ruling on behalf of 19(1) with respect to a proposed donation of 24(1)
As discussed in a telephone conversation (Thornley-19(1)) on September 1, 1992, questions of valuation or the determination of fair market value of property are circumstances under which a request for an advance ruling may be refused. In this respect we acknowledge your telefaxed request of September 1, 1992 for a withdrawal of the advance income tax ruling on behalf of19(1).
The Department's position with respect to matters upon which we may not rule is set out in Information Circular 70-6R2, see in particular paragraph 14. Regarding the fair market value of gifts, paragraph 3 of Interpretation Bulletin IT-297R indicates that the person who determines the fair market value of the property must be competent and qualified to evaluate the particular property being transferred by way of a gift. In another publication entitled "Gifts in Kind" it states, "The Appraiser should not be associated with either the donor or the recipient institution. Dealers, appraisers and other individuals knowledgeable about the market value of the object being donated may give an expert evaluation." In this respect, generally one appraisal is sufficient but if qualifications are in doubt or difficult to establish then two appraisals may be necessary to establish the fair market value of a donation. As indicated in our telephone conversation, the valuations section of the Edmonton District Office may be able to give you some assistance in this matter but they would generally not supply a written appraisal. Where the gift is other than a gift of Canadian Cultural property, the value of which would be determined by the Canadian Cultural Property Import and Export Review Board, the valuation section of the appropriate District Office may later be called upon to review an appraisal of property as part of a review of the donor's income tax return.
Documents submitted with ruling requests are not required to be returned, however, in this instance we have complied with your request to return your clients documents. Your deposit is also being returned to you, however, it will be mailed separately.
We trust our comments will be of assistance to you.
Yours truly,
E. Wheelerfor DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch