Line 311 - Charitable donations
Line 311 - Charitable donations
Complete Schedule 2, Charitable Donations and Gifts, if, during the tax year, you made charitable donations, or unused charitable donations were transferred from a predecessor corporation after amalgamation or from a subsidiary corporation after wind-up.
You can claim a deduction from net income for charitable donations made to any of the following qualified donees:
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registered charities (including registered national arts service organizations)
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registered journalism organizations
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registered Canadian amateur athletic associations
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registered housing corporations resident in Canada set up only to provide low-cost housing for the aged
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registered Canadian municipalities
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registered municipal or public bodies performing a function of government in Canada
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the United Nations or its agencies
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universities outside Canada, of which the student body ordinarily includes students from Canada, that are registered with the CRA
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registered foreign charities to which His Majesty in right of Canada had made a gift
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His Majesty in right of Canada, a province, or a territory
References
Subsections 149(1) and 149.1(1)
The maximum amount of charitable donations that a corporation can deduct is equal to 75% of its net income (line 300).
This limitation can be increased by the following amounts:
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25% of the taxable capital gains arising from gifts of capital property made in the year and included in taxable income for the year; this amount is multiplied by the eligible amount of the gift divided by the corporation's proceeds of disposition for the gift
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25% of all taxable capital gains in the year from the disposition in a previous year of a non-qualifying security of a corporation that is making a gift to a qualified donee
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25% of whichever is less:
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the amount of recapture, included in the income of the year, arising from the donation of a prescribed class of depreciable property
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the eligible amount of the gift divided by the corporation's proceeds of disposition for the gift, multiplied by the lesser of the capital cost and the proceeds of disposition of the property minus any outlays and expenses made for the purpose of making the disposition
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Charitable donations are deducted in the order they were made (first-in, first-out rule).
If you are reporting nil net income or a loss for the year, you cannot claim donations to create or increase a loss.
However, you can carry forward unused charitable donations and claim them in any of the five following tax years.
Note
On line 255 of Schedule 2, enter the amount of any other
adjustments (these adjustments would apply to
corporations that have undergone an acquisition of
control and whose donations carryforward that accrued
before the acquisition of control are not deductible after
the acquisition of control).
Complete Part 1 of Schedule 2 to calculate the total donations available and the charitable donations closing balance.
Complete Part 2 of Schedule 2 to calculate the maximum deduction allowable and to determine the amount to claim for charitable donations including gifts of capital property.
On line 311, enter the amount you want to deduct in calculating taxable income. This amount cannot be more than the lesser of:
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the total donations available
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the maximum deduction allowable
Complete Part 6 of Schedule 2 to establish the continuity of charitable donations.
You do not have to file receipts with your return. However, you have to keep them in case the CRA asks for them later.
Notes
When a credit union calculates its income for purposes
of the 75% limit, it has to add back any amounts it
previously deducted for bonus interest payments and
payments for allocations in proportion to borrowing.
Where a corporation makes a gift of a non-qualifying security, that gift has to be ignored for the charitable donations deduction. However, if the donee disposes of the security within 60 months, for consideration other than another non-qualifying security of any person, or the security ceases to be a non-qualifying security of the corporation within 60 months, the corporation will be treated as having made the gift at that later time.
A non-qualifying security generally includes:
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an obligation of the corporation or a non-arm's length person
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a share of the corporation or a share issued by a corporation with which the corporation does not deal at arm's length
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the corporation's beneficial interest in a trust in certain circumstances
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any other security issued by the corporation or a non-arm's length person
Specifically excepted from this definition are obligations, shares, and other securities listed on designated stock exchanges and deposits with financial institutions.
The eligible amount of gifts to Canada, a province, or a territory is deductible on line 311 as charitable gifts under paragraph 110.1(1)(a). Monetary gifts to Canada should be made payable to the Receiver General for Canada. Send the gift, along with a note stating that the money is a gift to Canada, to:
Place du Portage
Phase III
11 Laurier Street
Gatineau QC K1A 0S5
If you made such a gift, you should have been provided with an official donation receipt.
References
Paragraph 110.1(1)(a)
Subsections 40(1.01), 110.1(1.1), and 248(31)
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