Got spare land? Consider donating it. :CRA SOTW
Alan Baggett
Got spare land? Consider donating it
By Talbot Boggs
2008-07-14 12:20:00
(Special) - I get my fair share of mail. My first task when it comes
in the door is to lay it out on the kitchen table and separate the
junk from the good stuff.
A few months back I got an envelope from Environment Canada that
immediately caught my attention because I can't ever recall getting
anything from that federal department. I get mail from Revenue Canada
all the time, but never from Environment Canada.
Expecting to see something about endangered birds or disappearing
beetles, I was surprised to find a modestly-attractive one-page flyer
with the title, Tax Tools for Private Land, printed above a mystical
image of rocks shrouded in mist on Manitoulin Island.
The flyer was all about the federal government's ecological gifts
program.
It seems that Canadians have donated more than 450 properties worth
more than $123 million to charities since the program was established
in 1995.
The ecological gifts program offers people who have rural or
wilderness property the opportunity to gift all or part of it to
charities and get a substantial income tax benefit.
In many cases, the landowner can continue to hold title and/or live on
the land.
Ecogifts range in size from thousands to millions of dollars and are
among the largest charitable donations being made in Canada today.
Many Canadians who own wetlands, woodlands or other wildlife habitats
cherish their land and want to see its natural features preserved.
Ecogifts allow Canadians the opportunity to create a natural legacy
and protect family lands while benefitting from specific tax
benefits.
Ecological gifts receive tax treatment that is superior to many other
charitable gifts.
Ecogift donations are not subject to the usual income limits (usually
75 per cent of income) in calculating the income tax credit for
individuals or deductions for corporations.
Ecogifts made after May 2, 2006, benefit from the elimination of the
normal capital gain realized on the disposition of property.
Currently, 50 per cent of the capital gain for non-certified gifts or
sales of land is included in taxable income.
Another advantage is that landowners don't need to sever their
connection with the land.
They can conserve the natural values of their property and still
retain ownership by entering into a conservation easement agreement
with a nature conservation organization that will restrict designated
activities in perpetuity.
As well, landowners may donate the property to an eligible
organization and keep the right to use or live on the land for their
lifetime or the life of someone they name, such as their children.
Environment Canada issues a Statement of Fair Market Value certifying
the gift's value after it is made, which the donor then submits with
their income tax return.
Environment Canada reviews and approves the recipient of gifts to
ensure the organizations are dedicated to protecting Canada's natural
heritage.
Income tax penalties can be imposed on charitable and municipal
recipients of ecogifts that dispose of title or change the use of the
properties without Environment Canada's prior authorization.
To claim a land donation as an ecogift, Environment Canada must
approve the recipient and certify the ecological sensitivity and fair
market value of the gift.
Talbot Boggs is a Toronto-based business communications professional
who has worked with national news organizations, magazines and
corporations in the finance, retail, manufacturing and other
industrial sectors. (boggsyourmoneyrogers.com)
Copyright 2007 Talbot Boggs
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