Advisory on Charitable Tax Receipts
March 16, 2011
In an effort to share important information with our stakeholders, the Canadian Cultural Property Export Review Board (Review Board) encourages designated organizations and donors to exercise due diligence when issuing or making claims with charitable tax receipts under the Income Tax Act.
- When a designated organization withdraws its application from the certification process after being provided with an independent monetary appraisal obtained by the Review Board, the charitable tax receipt subsequently issued by the organization in respect of an irrevocable gift should show the fair market value of the donated property at the time the gift is made. A registered charity that issues a charitable tax receipt that includes incorrect or false information may be subject to penalties or other sanctions, including the revocation of its registered status under the Income Tax Act. A donor who claims a tax credit or deduction based on such a receipt may be subject to a reassessment by the Canada Revenue Agency under the Income Tax Act.
- When the Review Board has determined the fair market value of certified cultural property, the value determined by the Review Board must be used by the donor in respect of any gift of that property for a period of two years from the date of the determination, whether the gift is claimed as a charitable gift, or as a gift of certified cultural property, and whether or not a T871 has been issued.
For more information on the income tax implications, please contact the Canada Revenue Agency.