Donations and bequests

More and more people want to donate money that will provide long-term economic benefits to their community. If this is your case, a well-designed tax strategy could allow you to support a cause you care about without penalizing your heirs.

Individuals can make charitable donations:

• while they are alive (living trust)
• upon their death (bequest)

In both cases, donors can make donations to any registered charitable organization.

Tax credits for charitable donations

Individuals who make donations are entitled to federal and provincial tax credits. Eligible donations are generally limited to 75% of net income, and any balance can be carried forward for 5 years. The limitation grows to 100% of net income in the year of death or the year preceding death.

Donating money or property

You can donate:

• money
• publicly traded stocks
• property (home, cottage, business, land, etc.)
• registered (RRSP, RRIF) and non-registered investments
• life insurance policies
• collections, jewellery, art

When you make a donation, you receive a receipt for the fair market value of the donated property and generally speaking, capital gains or losses must be determined based on this amount. Some specific rules may apply depending on the property donated or organization receiving it.