Million Dollar Journey

Building Wealth through Saving and Investing

Welcome to Million Dollar Journey! If you're new here, you can learn about me, read our user guide, and even follow my net worth updates. A great place to start reading is with the popular articles located in the right side bar. If you would like to join thousands of others and keep up with the free daily updates, you can subscribe to the RSS feed via reader or E-mail.

On your way out, make sure to check out the exclusive Million Dollar Journey Freebies and Deals.

Tax Considerations for Gifts

MDJ has featured articles about charitable donation tax credits and using flow through shares to maximize your donations. But what about the tax issues surrounding gifts, which may be triggered when donating stocks, bonds, land or building to a registered charity.

Personal collections such as sculptures, paintings, stamps, coins, or other antiques that would be useful to a gallery or museum involve certain considerations of their own. Please note that this article is only skimming the surface and consulting a tax professional is recommended.

Non-Charitable Scenario

Canada does not impose a gift tax and hence, a Canadian resident is bound to receive the full value from a gift (including an inheritance). However, note that gifts from an employer are considered a taxable benefit and need to be reviewed carefully. If an investment real estate property is gifted (say, parent to child), the gift-giver is deemed to have sold the property at fair market value and the resulting capital gains, if any, will be taxed.

Nonetheless, if the investment property being gifted becomes an adult child’s principal residence, the accrued gains till that time will be taxed but the adult child is not on the hook for further taxation. This related tax article discusses these issues in detail, while attribution rules as applicable to minors can be found here.

Charitable Scenario

One can maximize their tax credit when donating to charities. Eligible charity receivers (donees) include registered charities, registered national arts organizations, registered housing corporations providing low-cost housing to seniors, registered amateur athletic associations, the federal or provincial governments, to name but a few.

Typically, all or part of the gift value can be claimed, up to 75% of one’s net income. Donating capital property can offer a raised limit, which can be calculated by filling in the charts at this link and using the answers in Schedule 9.

Non-qualifying gifts

Donating shares of a self-controlled corporation or any security not listed on a stock exchange entail special rules. More details can be found under the capital gains section here.

Other Types of Gifts

Donating an ecologically sensitive piece of land (say, in the Mixed Wood Plains Ecozone or the Montane Cordillera Ecozone) to one of the governments (federal or provincial), municipalities, or an approved registered charity can be claimed. Cultural property of national significance can be gifted to Canadian institutions and public organizations under the Cultural Property Export and Import Act. In both cases, the fair market value is used to determine the eligible gift amount. More information is available at this link.

Gifts to US charities can be claimed if the Canadian resident has a US income for the year. Or, up to 75% of the individual’s net world income can be used to file a claim for gifts made to certain eligible US organizations.

Donation appraisals

An appraisal of a real estate or personal property by an independent professional appraiser or valuator is necessary to determine a fair market value and arrive at an eligible amount to be claimed on the tax return. However, if the fair market value of the gift is less than $1000, a professional evaluation may be dispensable but proper record keeping is essential in all cases.

Maintaining receipts is very important for all donations. The CRA page on Gifts and Income Tax has comprehensive information for interested readers.

If you have experience in giving gifts to charities and claiming them, please include any relevant tips for others to remember in the comments.

About the Author: Clark works in Saskatchewan and has been working to build his (DIY) investment portfolio, structured for an early retirement. He loves reading (and using the lessons learned) about personal finance, technology and minimalism. You can read his other articles here.

One Comment, Comment or Ping

  1. 1. Erick

    I recently wanted to make my annual donation to charity, but was short of cash and decided to liquidate a mutual fund with a capital gain.

    Once I realized that the charities I wanted to donate to weren’t setup to receive shares, I found these guys:

    You pick the charities and how many shares each receive, and their system will spit out a form to sign and send to your broker.

    Questrade hadn’t processed a request like this, so there were a few delays, but to their credit, there weren’t any trading fees to complete the transaction.

    Note that Canadahelps takes 3% for processing the transaction. Based on my experience, this is deducted after the charitable receipt is issued but before the money is sent to the designated charities.


Reply to “Tax Considerations for Gifts”

Subscribe without commenting

Get the Latest

    Join 25,000+ Subscribers via:


Money Tips Newsletter

Premium Sponsors

Recent Comments

  • JC: Rule #1 – There are no rules for Rent To Own Rule #2 – Negotiate the best deal for yourself Rule #3...
  • Mohammad: I used to use walmart mastercard for a while. After a glitch to send statement notification and not very...
  • Chirag: Hi Ed, Smith Manouevre with CCPC investment: I am not sure if this has been previously covered. I have a RBC...
  • SST: re: “…with oil trading around $50, it is a gut wrenching time to be invested the oil and gas...
  • FrugalTrader: @Craig, thanks for that. I pulled the RDS data from an article that I found, but I cant’ seem to...
  • Craig: How can SU have 11 consecutive years of dividend increases but only start paying dividends since 2009? Similar...
  • BeSmartRich: Wow. That was very impressive net worth update and congrats on paying off your principal residence...
  • BeSmartRich: I am looking into adding some Suncor while the price is down. Chevron and Exxon are also too good to...
  • Joel: China Petroleum = Sinopec for readers looking to research. Also, if you buy suncor you get the dividend tax...
  • Walter: bt, TD would NOT know to settle in another account. Just think of it in the simplest form. Each account is...