There are times when it makes sense to consider donating personal property to the WSO. Canada Revenue Agency calls a gift of personal property a gift-in-kind, and defines it as: a gift of property other than cash such as capital property (including depreciable property) and personal-use property (including listed personal property). A gift in kind does not include a gift of services.
Here are some things to keep in mind when you donate property:
- If you plan to give away property, any capital gain you have made on the property since you got it may be subject to tax.
- Your own situation will affect the tax status of the gift. If you are an artist, dealer, or collector, different tax rules apply when you donate property from your inventory.
- Please check with the WSO prior to making your donation to ensure that the symphony can accept your gift of property.
- In most cases, individuals will have to have the property appraised at their expense, to determine its fair market value for tax receipt purposes.
Who should appraise a gift?
For every situation individuals are encouraged to contact a professional appraiser, valuator, or other individual who is accredited in the field of valuation. That individual should be knowledgeable about the principles, theories, and procedures of the applicable valuation discipline and follow the Uniform Standards of Professional Appraisal Practice or the standards of the profession. Also, he or she should be knowledgeable about and active in the marketplace for the specific property.
The chosen individual should be independent. For instance, he or she should not be associated with the donor, the qualified donee, or another party associated with the purchase, sale, or donation of the property. The individual should also be knowledgeable about the elements of a properly prepared and credible valuation report.
The fair market value of the property gifted will be deemed to be the lesser of the property’s:
- fair market value otherwise determined; and
- its cost (or adjusted cost base if it is capital property), at the time the gift was made. It also applies to certain property that was acquired by the individual less than three years before the day the gift was made. It must also be reasonable to conclude that when the property was acquired, the donor expected to make a gift of it. It does not apply to the situation where the gift is made as a consequence of the donor’s death.
Please Seek Expert Advice: When considering a planned gift, it is important to assess your overall financial circumstances. Therefore, it is important to consult your financial advisor when making a planned gift so you can choose a strategy which best provides you or your estate with the largest tax savings while fulfilling your charitable goals. If you are thinking about personal property that have appreciated in value, you should seek expert advice from a tax specialist or financial planner. The WSO strongly recommends that you seek professional advice to ensure your financial goals are considered, your tax situation reviewed and your planned gift is tailored to your circumstances. For further information, please call Beth Proven at (204) 949-3989 or email firstname.lastname@example.org.