W.C. Bailey 957-2061
24(1)
Attention: 19(1)
May 2, 1990
Dear Sirs:
Re: Tax Receipts from Sports Federations
This will reply to your letter of April 12, 1990.
You enquire whether a sports federation is permitted to establish a trust fund for an athlete and give receipts for income tax purposes to persons who direct donations to the trust fund of that particular athlete.
Deductible receipts for income tax purposes for gifts to amateur sports activities may only be issued by a registered Canadian amateur athletic association. Registration is accomplished by applying and being approved by Revenue Canada. A donor may not direct that a contribution to a registered association be channelled to or for the benefit of a particular athlete. If the association permits this to be done, it is not acceptable for it to issue a deductible receipt for tax purposes in that instance. It is acceptable however for a donor to direct a contribution to a particular discipline of sport and receive a deductible receipt.
We're sure you can understand the reason for this position. A gift, for tax purposes, must be an outright gift with no strings attached. Otherwise a contribution could be self benefitting. For example, parents could support their children in their athletic endeavours and be subsidized by the public purse.
We trust that this reply has answered all your concerns.
Yours truly,
E.M. Wheeler for Director Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch