Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Amount of a donation that is considered to be a "gift" when an annuity is purchased by the charitable institution for the donor.
Position:
The total of the annuity payments expected to be received by the annuitant in excess of the amount of the donation
Reasons:
See IT 112R2 - Annuities Purchased from Charitable Organizations.
970824
XXXXXXXXXX J.P. Dunn
Attention: XXXXXXXXXX
May 20, 1997
Dear Sirs,
Re: Calculation of Tax Receipt for Annuity
We are writing in response to your facsimile transmission of March 25, 1997 wherein you had requested information regarding the calculation of the amount considered to be a gift to a charity in circumstances in which an annuity is purchased by the charity for the donor.
For your information, we are enclosing a copy of Interpretation Bulletin IT-111R2 entitled "Annuities Purchased from Charitable Organizations" which discusses and provides examples of the calculations of the amount of a gift in situations in which an annuity is purchased for the donor. We have also enclosed a copy of a Special Release to the above publication.
As noted in paragraph 6 of the Interpretation Bulletin, the amount of the gift in such a situation is considered to be the excess of the amount of the contribution by the donor over the total of the payments expected to be received by the annuitant under the annuity.
We trust that this is the information which you require.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
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© Her Majesty the Queen in Right of Canada, 1997
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© Sa Majesté la Reine du Chef du Canada, 1997
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