Wednesday, March 5, 2008

Charity buys painting, you give cash back, they issue tax receipt...

"Charitable organizations are increasingly turning to art auctions as a source of donation revenue. In these situations, either artists themselves or individuals or corporations donate works of art. If an artist contributes his or her own work of art then the artist is deemed to have sold it in the normal course of business at fair market value at the time of the gift. As the work of art comes from the artist's inventory the sales price must be included in the artist's taxable income. As is the case with donation of services, the artist should sell the work of art to the charity and then donate the cash from the sale back to the charity. The artist should still charge GST and if applicable. The donation receipt issued by the charity to the artist can be used to offset the taxable income of either the artist or the artist's spouse."

This excerpt represents the new Canadian tax law for charities...You sell painting to charity, they pay you, you write cheque or give cash back for same amount, they issue tax receipt for cash donation...otherwise the charity CANNOT now issue a tax receipt!!!!

1 comment:

grovecanada said...

Correction...the tax law has been amended...again...fpr information on current Canadian tax law, just bang your head against the wall three times, then forget you ever cared...then go drink a lemonade...homemade...