Subsection 110.1(1) - Deduction for gifts
Paragraph 110.1(1)(a) - Charitable gifts
Cases
Hudson Bay Mining and Smelting Co., Ltd. v. The Queen, 86 DTC 6244, [1986] 1 CTC 484 (FCTD), aff'd 89 DTC 5515 (FCA)
The sale by the taxpayer to the Manitoba Hydro-Electric Board of hydro facilities for what was agreed upon in the negotiations to be a net price of $750,000 was effected by Manitoba Hydro purchasing the assets for $3,600,000 and the taxpayer making a "gift" to Manitoba Hydro of $2,850,000. Since the evidence established that the two payments were interdependent, the $2,850,000 payment could not be said to have been made gratuitously, and was not a "gift".
Olympia Floor & Wall Tile (Quebec) Ltd. v. MNR, 70 DTC 6085 (FCTD)
Gifts which the taxpayer made to Jewish organizations in the Montreal area in amounts over $100 were accepted to have been made for the purpose of increasing its sales and, therefore were deductible in computing its income. Jackett P stated (at p. 6089) that he could find "no inherent incompatibility between an ‘outlay…for the purpose of…producing income' and a gift to a charitable organization." Conversely, "even though they took the form of contributions to charitable organizations [they] were not ‘gifts' within the meaning of…section 27(1)(a) [the predecessor of s. 110.1(1)(a)]" (p. 6090).
See Also
Pustina v. The Queen, 96 DTC 1594 (TCC)
Mogan TCJ. indicated that if a car dealer donated a new car to a local charity that issued a charitable receipt, the deemed proceeds to the dealer under s. 69(1) would be offset by a charitable deduction.
Administrative Policy
18 November 2003 T.I. 2003-001469
The grant of a stock option by a corporation would not appear to result in a reduction in the granting corporation's assets. This would preclude the grant being viewed as a transfer of property from the corporation to the charity to whom the stock option was granted.
29 January 1997 T.I. 963494
General discussion of the circumstances in which a corporate donation to an Indian band council (which RC recognizes as a Canadian municipality for purposes of s. 110.1(1)(a)(iv)) would qualify for deduction.
6 June 1994 T.I. 933590 (C.T.O. "Corporate Gift of a Life Insurance Policy"
Where a corporation purchases a large whole life insurance policy in respect of one of its key employees and gifts the policy to a charity so that the charity becomes the registered owner of the policy and the beneficiary of the face amount of the policy while the corporation retains the right to any accumulated dividends payable on the policy (and uses the accumulated dividends to the extent available to pay annual premiums), RC will not view the transfer as constituting a gift because of the retention of the right to the accumulated dividends.
9 July 1993 T.I. 930660 (C.T.O. "Whether Corporation can make Donation Rather than Estate"; Tax Window, No. 33, p. 6, ¶2641)
Where a corporation makes a charitable donation in lieu of the estate holding its shares making such donation, the donation by the corporation may not qualify as a "gift".
IT-110R2 "Deductible Gifts and Official Donation Receipts"
Articles
Alan Steinfeld, Stephen Moverley, "When is a Gift Completed?", All England Legal Opinion, No. 10, July 2001.
Paragraph 110.1(1)(b) - Gifts to Her Majesty
Administrative Policy
ATR-63, 20 April 1995 "Donations to Agents of the Crown"
In the absence of a specific provision to this effect in an organization's enabling legislation, RC required an opinion from the Deputy Attorney General of the province that the organization was a Crown agent.
Although decisions regarding specific beneficiaries must be the exclusive responsibility of the entity to which the donations are made (in this case, the organization), here "the direction that the donations be used for particular purposes was not binding and was in such general terms that it was clear that the exclusive responsibility regarding the use of the funds remained with the organization".
20 January 1995 T.I. 5-950041
Given that s. 53 of the College and Institute Act, R.S.B.C. 1979, c. 53 provided that an institution was for all its purposes an agent of the Crown in right of the Province, a gift to a college designated as a provincial institute under that Act qualified as a gift to the provincial Crown.
16 December 1992 T.I. 923559 (C.T.O. "Crown Gifts to Agents of Her Majesty")
A gift to a foundation established under the University Foundation Act (Ontario) qualifies as a gift to an agent of the provincial Crown.