Gifts & Taxes
As inevitable as the coming of spring, so comes tax time. A lasting and rewarding option involves the redirection of your tax dollars. Most people have more control over how this money is deployed than they might think. The PIPRC wishes to offer suggestions on such redirections. For case by case advice, see your tax specialist.
Environmentally Sensitive Property Donation
The Gulf Islands lie within an area considered to have sensitive ecosystems in need of protection. The Ecology page can provide more information.
If your property qualifies as environmentally sensitive and you obtain a Minister of Environment Certificate, donation to the PIPRC/CRD or the Crown is an option that can save significantly on taxes. Upon donation, 100% of the appraised value of the property becomes a deductible donation. If your net income is not sufficient to take full advantage of this tax credit during the current tax year, the remainder of the credit may be applied over the following five tax years (or fraction thereof as is required to use up the tax credit).
Individual gifts of environmentally sensitive property to PIPRC/CRD/Crown result in a tax receipt for 100% of appraised value. This receipt is deductible to a maximum of 29% of your net income and otherwise may be brought forward as above.
Corporate gifts of environmentally sensitive property to the Crown result in a tax receipt for 100% of assessed or appraised value. This receipt is deductible to a maximum of 75% of corporate net income and may be brought forward as above, providing that the land is a capital item. If the land is inventoried land additional considerations enter into the calculations. A portion of the accrued capital gain may also contribute to the total tax credit for the property.
Purchase to give
Another option for involves the purchase of an environmentally sensitive property (PIPRC has a wish list with properties in all price ranges) which may then be donated (as above), employing the same tax incentives.
Group & Long Term donations
It is also possible to pool resources with friends, family or corporate partners in order to purchase and donate a property, provided the documentation stream between all parties is transparent (so PIPRC currently understands). A transaction may also be spread out over several years.
The donation with the greatest impact is the gift of land which is officially deemed as Environmentally Sensitive. Obtain a letter of undertaking indicating the acceptance of a particular property as Environmentally Sensitive before you begin the donation process.
Capital gains and losses may enter into calculations — usually this occurs when the property has been held by the donor for some period. No capital gain issues arise where a property is purchased to donate to an appropriate trust or governmental body within a reasonable time frame.
Of particular interest to a corporation may be the paper loss that occurs when comparing current assessed property value to current appraised property value. Corresponding gains elsewhere in a portfolio can offset these losses.
To find out more about the tax benefits for corporations and individuals who donate ecologically sensitive land for parks, please see:
Gifts: Giving It Away
West Coast Environmental Law has information about income tax implications of gifts of land. They also provide information about covenants to protect private land when title is transferred.
For Corporate Tax, see CCH Section 968, Form T2S (revised and moved with revisions).
For further information and/or copies of the above documents please contact Pender Islands Parks & Recreation Commission.
© Images courtesy of Neil Bruder & Minette Layne