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Attention: XXXXXXXXXX
Dear Sirs:
RE: Anonymous Charitable Gifts
This is in reply to your letter of November 20, 1992 in which you requested our technical interpretation of subsection 118.1(3) of the Income Tax Act (the "Act") in a hypothetical situation.
You referred to a situation where several individuals each own an undivided interest in an object of art described in paragraph (a) of the definition of "total cultural gifts" in subsection 118.1(1) of the Act. The individuals wish to donate the object to an institution described in paragraph (b) of the definition of "total cultural gifts". The troublesome point is that the individuals do not wish to reveal their identity to either the recipient institution or the Canadian Cultural Property Export Review Board.
Accordingly, you queried whether it would be acceptable to the Department to have the donation be made through an agent of the individuals. Under this arrangement, the institution would issue a receipt naming the agent as the donor. The agent would issue to each of the individuals a copy of the receipt and a statement disclosing the arrangement together with disclosure of the respective interests of all the individuals. You queried whether this would be permissible so as to enable the individuals to make a deduction pursuant to subsection 118.1(3) of the Act.
Our Comments:
Subsection 118.1(3) of the Act provides for an individual, in calculating his Part I tax payable for a year, making a deduction in respect of "total gifts" for the year. "Total cultural gifts" are one component of "total gifts" as defined in subsection 118.1(1). Pursuant to subsection 118.1(2) of the Act, a gift shall not be included in "total cultural gifts" of an individual unless the making of the gift is proven by filing with the Minister a receipt therefor that contains information prescribed by section 3501 of the Income Tax Regulations. According to paragraph 3501(1)(g) of the Regulations, a receipt must show the name and address of the individual. Since the institution would not know the names of the donors, it would not be able to issue official receipts. Thus it is our view that individuals making an anonymous gift would not be able to deduct under subsection 118.1(3) of the Act any amount in respect of the gift.
We trust these comments will be of assistance.
Yours truly,
E. Wheeler for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch