Canadian tax laws are structured such that in the area of estate planning, donations if made to a registered charity, can give rise to tax credits that can be used to offset the income of the deceased.
Accordingly, if a deceased person leaves a charitable bequest in his or her will, then the tax department deems that the donation is made immediately on the deceased death in the year of the death, and that can be used in the immediately preceding year for taxation purposes.
Cash bequests are undoubtedly the most common form of charitable gift, however charities are more than willing to accept securities, real property, valuable art and other such assets.
It is of course extremely important to determine if the gift is in fact charitable or not.
From a tax perspective, only a gift to a registered charity or gift to another qualified donee gives rise to the tax benefits permitted by the income tax act.
Where charitable gift would otherwise fail, it possibly may be saved by way of the cy-pres doctrine where the court applies the gift only to charitable gifts of a similar nature. To be a registered charity, it must have as its exclusive purpose the pursuit of charitable ones and there are generally three types:
A charitable organization that actually carries out charitable act to the such as the Salvation Army;
2. A public foundation whose primary purpose is raising and dispersing funds to qualified domains, such as the United Way
A private foundation that does much the same as a public foundation but does not meet its requirements. Generally speaking charity must be public in nature and generally related to topics such as the relief of poverty, the advancement of education, the advancement of religion, and other purposes beneficial to the community.
Persons wishing to take advantage of estate planning such as charitable gifting should seek the services of a qualified estate solicitor. it is reported that 84% of Canadians aged 15 and older make regular charitable or nonprofit donations , usually to a variety of causes in which they believe personally, and for whom they feel compassion the most. in fact theResearch shows that only 13% of donors do so for income tax credits, whereas up to 94% of donors do it simply because it makes them feel better and they feel compassion for the recipients, and that they’re giving back to society.as was blogged last week, wherein it was reported that 50 Americans had contributed over $7 billion in charity in 2012, it would apit would appear that the bulk of charitable dollars comes from a very small six segment of the population . generally speaking the likelihood of giving tends to increase with age, increases with income, and is also associated with higher levels of education. women are more likely than men to make donations, whereas men are more likely to make larger average gifts . discussions with billionaires and their philanthropy indicates that their major motivation for giving was to give back to the community .