[David Blue]

http://www.barterworld.com

http://www.barterwor...20charities.pdf

Have a couple clients into this, Did not call me first.

Is this one a go or is this one of those that will become a horror story.

Looking for guidance.

$5,000.00 donation equals X $ of Donation receipts.

The client may or may not be liable for the loan, It is hard to tell.

Any thoughts, Please and Thank you in advance.

I am not confortable with it, but I may be off base on this charity setup.

[Joe]

David Blue, on Mar 19 2008, 09:31 AM, said:

Wasnt it you before who suggested for "non-standard" donations to:

1) File without the donation at all

2) Mail in a T1-adj with all the "donations" documentation and let CRA choose to allow any/all/none?


,

[David Blue]

Yes, but I am having second thoughts on the whole issue. I just am having second thought on this whole charity stuff. I did review the other posts.
Call it second guessing myself. and I kinda get the feeling that the client on this one doesent want to pay for all the extra work and for any notice of reassessment that might come at a later time
if approved on a T1adj and then assessed 3 years later.

I was hoping someone else has some "Experience" with this new Charity set up.

[davemorias]

David Blue, on Mar 19 2008, 06:16 PM, said:

Yes, but I am having second thoughts on the whole issue. I just am having second thought on this whole charity stuff. I did review the other posts.
Call it second guessing myself. and I kinda get the feeling that the client on this one doesent want to pay for all the extra work and for any notice of reassessment that might come at a later time
if approved on a T1adj and then assessed 3 years later.

I was hoping someone else has some "Experience" with this new Charity set up.

This is perfect for the guy with the stuff in the basement. He can get a charitable donation plus an enhanced principal residence exemption. Serendipity.

[samhill]

My rule of thumb, and I have two thumbs; is that if the deduction is greater than the actual amount given, what the hey!

Usually, the deduction is smaller if the giver is given something in exchange for the donation.

[spenceh]

David Blue, on Mar 19 2008, 11:31 AM, said:

http://www.barterworld.com

http://www.barterwor...20charities.pdf

The following is legislation which has passed in parliament and is currently in the senate.
Please note that it is retroactive to February of 2003.

http://www2.parl.gc....P...&File=68#13

[Carole]

spenceh, on Mar 19 2008, 07:53 PM, said:

The following is legislation which has passed in parliament and is currently in the senate.
Please note that it is retroactive to February of 2003.

http://www2.parl.gc....P...&File=68#13

I had a client come to me as well 'after the fact' with a charity receipt for 4 times his donation amount. I did not claim the donation for him, after much research and discussion with him, and have advised him to wait for the fall out. If it comes back in the donees favour (which I doubt) we will do a T1adj to claim it..

I have also added a new letter and a copy of the Star Article posted on the profile site to all clients this year to advise of this situation and to avoid making donations without consultation first.

Another client actually said his neighbour was trying to get him to 'donate' and he was surprised by the legal ramnifications of this and would avoid getting involved.

As accountants, I like that we can add value to the tax preparation services we already offer.

[David Blue]

After speaking with a learned coleague, I have decided that I will not be claiming these donations. I will claim the origional amount given and that is all. I spent some additional time on the matter. I have determined it is not worth the stress involved. Clients will have to go elsewhere. In todays paper (Edmonton Journal Two articles on the subject of Tax Donation Scams quoting a professor out of Western Ontario Univeristy , ( Daniel Sandler (Teaches tax law) , " We call these deals scams" He has written a paper on the subject called Kicking a Gift Horse in the Teeth. He called these programs "Morally reprehensible" I am just going to refer these clients to a Large Accounting firms who can deal with this donation scams.

Listed below are the links to the two news stories.

http://www.canada.co...fa-1d64803676c7

http://www.canada.co...news/index.html

[JohnV]

David, seems to me that as long as the barter arrangements are recorded at FMV (goods and services exchanged), then bartering is fine...

Here, if there is an individual (a non business entitity) involved, as long as the tax receipt equals the FMV, there should be no problem

If it is a business, then you have to wonder how the original cost of the bartered item was recorded. If it has already been written off, then the donation receipt should be omitted.....

In no way shape or form should anything in excess of what you gave up be claimed.

Insofar as the debt angle goes, it seems to me that as long as the barter organization rules specify that you are on the hook for any barter liabilities, and enforcable at their FMV, then again it should not present a problem....as long as you do not claim any costs twice...once as a cost "on the books" when it is ultimately incurred, and once as a charitable receipt....

[David Blue]

John thank you for the input, I agree with your statement, At issue is that the Donation receipt is 4 times the value of the actual donation. I stirred up a hornets nest. I actually received a call from the Head or so he said of this charity situation. He did not like my tone or language used with my client about this program. But when I also mentioned that the promtor of his program was also trying to sell Gold Quest (not the corporation) the other off shore one. His (investor/promotor also told my client that he was in no way liabable for the loan. The call ended and he is calling his (investor/promotor in edmonton of this program.


Back to work later and thank you John.