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High Octane Charitable Giving

High Octane Charitable Giving

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High Octane Charitable Giving

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    1. High Octane Charitable Giving

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    5. High Octane Charitable Giving Known as Public Charities: All resources devoted to charitable activities; and More than 50% of trustees, directors must be at arms length. However, charities are not re-designated solely on contribution; and/or Not more than 50% (75% for Foundations) of capital contributed or paid in came from related persons (except other charities, municipalities, governments, etc); and Can carry on other businesses (e.g. annuities, car washes, gift shops) Public Foundations can not incur some debt (e.g. annuities).

    6. High Octane Charitable Giving All aspects of Charitable Organization and Public Foundation except: More than 50% of trustees or directors are not at arms length; and/or Can not do some investments (non-qualifying investment) Can not do any other business More than 50% of capital came from related persons or companies; and

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    14. Combined federal and provincial rate = highest MTR (exception is Alberta) Tax deduction versus tax credit Gifting non-cash property reduces tax savings Property tax, GST, PST, and so on Advantage/eligible amount Timing of gift (current/deferred) Tax Treatment for Gifts

    15. Contribution limits (Indv/Corp) Contribution carryforwards Direct versus indirect tax savings ITA 110(2), 110(1)(d.01), (2.1), 110.1(1)-(7) Corp ITA 118.1(1)-(20) Indv 149.1(1)-(24) Reg 3500, 3702 Charities 38(a.1),40(1.01) 237.1(1) 248(30)-(41), 143.2(6.1), Reg 3200 ALL of the above Tax Treatment for Gifts, cont.

    17. Cash Listed securities Insurance (intangible) Personal-use property (such as boats) Real property (such as vacant lots) Capital (such as buildings) Interests (such as trusts) Other/combinations Types of Property Gifted

    18. No longer king! No income inclusion Easy to use Universally accepted Different currencies acceptable Valuation simple Cash

    19. Non-private shares Maximize tax savings Easy to use Valuation easy to obtain Timing issues (when to issue tax receipt) Accounting required Listed Securities

    20. Generally deferred benefit Cash when received Windfalls/surprises Valuation Accounting issues Heavily endorsed Insurance (Intangible and deferred)

    21. Someone elses garbage Use can be more difficult External valuation if MV > $1,000 Convert to cash then donate CRA scrutiny (such as artworks) Operating Expenses (such as gas, tax, licenses) Obligated to accept Personal-use Property

    22. Use can be difficult External valuation required Often convert to cash then donate Operating expenses (such as utilities, taxes) Obligated to accept Net tax savings reduced Property taxes, maintenance, tennants, etc Real Property

    23. Use can be difficult External valuation required Convert to cash then donate Operating expenses (such as utilities, taxes) Management/tenant issues Obligated to accept Net tax savings reduced Capital Property

    24. Deferred benefit Often cash Easy to use once received HUGE Valuation issues Legal/accounting costs Ongoing reporting required No clear Finance roadmap Interests (Trusts)

    25. Trepidation Large $$$ Deferred Known/surprise Cross Border issues Tax issues for donor Gifting arrangements Promoted versus natural Other/Combinations

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    29. High Octane Charitable Giving Charity A with fiscal year-end of Feb 28, 2010 issued tax receipts for $1 million. Assuming no other assets, what amount must the charity expend on charitable activities by fiscal year-end 2011? $800,000 Charity B with fiscal year-end of Mar 31, 2010 issued tax receipts for $1 million. Assuming no other assets, what amount must the charity expend on charitable activities by fiscal year-end 2011? $35,000

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    36. High Octane Charitable Giving Gifts by Way of Bequest or Inheritance

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    79. CGA Personal Tax Planning handbook Charities section on PD Net (under Taxation) http://www.cra-arc.gc.ca/tx/chrts http://www.irs.ustreas.gov/ http://www.charitylaw.ca/index.html http://www.cagp-acpdp.org http://www.givingandvolunteering.ca/ dosborn@lawtonpartners.ca 1-888-944-1144, ext 256 Resources for CGAs

    81. High Octane Charitable Giving