According to the Canada Revenue Agency rules, if you take a tax deduction for a non-cash charitable contribution, you must get a qualified appraisal if the deduction claimed is $1,000 or more.
Donors of property to registered charities qualify for a tax credit based on 75% of the fair market value of the property. Capital gains taxes must be paid on the difference between fair market value and purchase price. A fair market value appraisal is the only type acceptable to the Canada Revenue Agency. The generally accepted meaning of fair market value is "the highest price, expressed in terms of money, that the property would bring in an open and unrestricted market between a willing buyer and a willing seller who are both knowledgeable, informed and prudent, and who are acting independently of each other". (Gifts and Income Tax, Canada Customs and Revenue Agency, P113 (E) Rev. 98).
Cultural Property Donation Appraisals
According to the Canada Revenue Agency rules, for deemed cultural property, you will require only one appraisal when the estimated fair market value of the donation is $20,000 Canadian or less. If the donation is above $20,000 it will require two appraisals, which must be prepared totally independently of each other.
Donors of certified cultural property may claim the full 100% of the appraised fair market value, and will not be subject to paying capital gains taxes on any appreciated values. However, corporate donors will be subject to the recapture of capital property depreciation losses.
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The painting on this page is by Helen Galloway McNicoll (1879 - 1915) and is titled Picking Flowers
Image used courtesy of the Library and Archives Canada