Cash donations made within 30 days from the date that real estate or shares of a private corporation are sold will exempt some or all of the capital gain from tax.
- The amount of the exempt gain will be based on the proportion of the proceeds that are donated;
- The purchaser must be arm’s length with both vendor and done;
- Within five years from disposition:
- The donor and non-arm’s length persons cannot reacquire the property or substituted property;
- In the case of redemption, the donor must deal at arm’s length with the corporation at the time of the redemption; and
- The previously exempt amount will be included in income for the year of reacquisition or redemption.
Disclaimer: Articles are for general information only and do not constitute tax advice. They cannot be relied upon.
Sam Faris is a Toronto-based Chartered Professional Accountant who practices as an independent consultant on high-level Canadian tax matters and handling disputes with CRA.He also published an article recently in the business magazine: HERE.