There are definite tax benefits to making donations of publicly-traded stock or units of mutual funds to VIU, rather than cashing them and donating the proceeds. Revenue Canada has now removed the capital gains tax on gifts of qualified stock to charities, making this an even more attractive medium for philanthropy and tax relief. The university receives the gifted stock and provides a charitable receipt to the donor with the value of the stock on the day of transaction.
These are gifts of property other than cash (i.e. cheques and credit card payments) and marketable securities. Gifts-in-kind include gifts of supplies, equipment, books, vehicles, and artwork that can assist VIU in presenting learning opportunities to students. Not all gifts are appropriate or acceptable. Please check with the Advancement & Alumni Relations Office to determine if your gift will assist our programs.
Gifts-in-kind eligible for tax receipt
The following requirements must be met:
- the gift is of value to the university
- an independent appraisal has been made of the fair market value of the gift
Gift certificates should be reviewed with the Advancement & Alumni Relations Office prior to acceptance as the terms of the certificate, and whether or not the donor is the issuer, determine the ability and timing of a receipt being issued.
Gifts-in-kind NOT ELIGIBLE for tax receipt
The following gifts-in-kind do not qualify as charitable donations under the Income Tax Act:
- gifts of professional or personal services of an individual
- gifts by a company of its principal product or service. Such gifts are considered promotional expenses rather than charitable donations under the Income Tax Act
- donations of old clothes, furniture, home baking, etc
- a payment for a lottery ticket or other chance to win a prize is not a gift
Appraisals for income tax purposes should be made by a qualified appraiser not associated with the donor or the university. It is the department’s responsibility to ensure the gift-in-kind is appraised. The appraisal will determine the fair market value (FMV) of the gift. One or more appraisals to establish the FMV may be required to calculate the eligible amount of the gift. See Canada Revenue Agency (CRA) publication P113(E) Rev. 07 or consult with the Advancement & Alumni Relations Office.
Where the value of the gift is $1,000 or less, CRA will generally accept a valuation made by a university staff member, providing the staff member is knowledgeable in the field and is qualified to establish the value of the gift. To meet the requirement for independence and avoid potential conflict of interest situations, the staff member should not be a member of the department receiving the gift.
If it is difficult to find an independent appraiser or if it would involve unwarranted expense, CRA will accept a valuation done by a university staff member, even though that value might exceed $1,000 if the circumstances are very unusual and if the FMV is just over $1,000. However, such persons must be qualified to establish the value of the gift.
Consult with the Advancement & Alumni Relations Office as required.
Details and the Gift-in-Kind Acceptance form.
For more information, please contact Susie Caswell, Advancement & Alumni Relations Office, Gift Planning and Donor Relations at email@example.com or at 250.740.6216.