While a gift in kind, such as real estate, art, antiques, is similar to a gift, there are some differences.
The donor receives a donation receipt for the value of the property donated which receipt can be used to reduce income tax in the year the donation is made and the subsequent five taxation years. However:
1) Any gain that the donor realizes is ordinarily subject to income tax in his hands in the year the donation is made;
2) An appropriate valuation of the assets being donated may be required.
The church obtains immediate use of the donated asset and it may retain or sell the particular asset. Any amount received by the church, which is above or below the value determined for purposes of the donation receipt, does not adjust the donation receipt amount.
Donation of property with a $10,000 value and a cost of $6,000 to the donor, resulting in a $4,000 capital gain
Federal & Ontario tax credits:
Tax on capital gain:
|Net income tax reduction:||$3,680|
see Assumptions for more examples.