When most people think of charitable donations, the first thing that comes to mind is cash. While monetary donations make up the majority of all donations, not all donations involve cash.
If you donated certified cultural property (like paintings, sculptures, books, etc.) that are considered to be of “great national importance” to an institution or public authority designated by the Minister of Canadian Heritage, you’re eligible to claim this tax credit. The taxable gains realized by your gift (if any) are tax exempt and any capital losses can be deducted within your normal limits.
The eligible amount of your gift is calculated using the fair market value (FMV) of the property, as determined by the Canadian Cultural Property Export Review Board (CCPERB).
Note: Before any claim can be made, you’ll receive a certificate for tax purposes from the CCPERB.
If you own ecologically sensitive land (like a covenant, an easement, or, if the land is located in Québec, a real servitude) and donate it to a qualified donee* (other than a private foundation), you’re eligible to claim this tax credit. There are a couple tax benefits related to this type of donation, including:
- A tax deduction for the FMV of your gift (a tax rate of 15% is applied to the first $200 of your donation, and a rate of 29% applies to the remaining amount). It should be noted that your claim is not limited to a percentage of your net income
- Any capital gains realized on the gift is reduced to zero
*In this case, a qualified donee can refer to any of the following:
- The government of Canada or one of its provinces, territories, or municipalities or
- A registered charity approved by the Minister of Environment and Climate Change
To be eligible, the land in question must be certified (either by the Minister or by someone on the Minister’s behalf) as being important to the preservation of Canada’s environmental heritage. The Minister will also determine the FMV of the gift. For more information, check out Pamphlet 113, Gifts and Income Tax.
Note: For a gift of ecologically sensitive land made before February 11, 2014, any unclaimed portion of the eligible amount of the gift can only be carried forward up to 5 years. For gifts made after February 10, 2014, the carried forward period has been extended to 10 years.
If you’re a resident of Québec and you donated a building located in Québec that can be used to house an artist’s studio or one more cultural organizations, the eligible amount that you’re allowed to claim for the gift can be increased by 25% as long as you meet both of the following conditions:
- The Ministère de la Culture et des Communications issued you a qualification certificate for the building, as well as a certificate that confirms its FMV (taking into account not only the building being donated, but also the value of the land on which it stands) and
- The gift was made to one of the following donees:
- A municipality located in Québec or a municipal or public body performing a function of government in Québec
- A registered charity operating in Québec, or operating in the arts or culture sector
- A registered cultural or communications organization or
- A registered museum
Where can I claim this?
Follow these steps in H&R Block’s tax software to file your 2016 taxes:
- On the PREPARE tab, click the OTHER icon. You will find yourself here:
- Under the CHARITABLE AND POLITICAL CONTRIBUTIONS heading select the checkbox labelled, Tax credits for donations and gifts (Schedule 9 & Schedule V), then click Continue.
- When you arrive at the page for Charitable donations, enter your information into the tax software. Be sure to indicate which type of donation you’re claiming.