I-3, r. 1 - Regulation respecting the Taxation Act

Section 985.9r3 Disposition versions

2013-07-03

985.9R3. For the purposes of the first paragraph of section 985.9R2, the value of property or a portion thereof owned by a registered charity and not directly used in charitable activities or in administration on the last day of a period must be determined as of that day and be equal to,

(a)  in the case of a non-qualified investment, within the meaning of subsection 1 of section 149.1 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), of a private foundation, its fair market value on that day or its cost amount to the private foundation, whichever is greater;

(b)  subject to subparagraph c, in the case of property other than a non-qualified investment that is

i.  a share of a corporation that is listed on a designated stock exchange, the closing price or the average of the bid and asked prices of that share on that day or, if there is no closing price or bid and asked prices on that day, on the last preceding day for which there was a closing price or an average of the bid and asked prices,

ii.  a share of a corporation that is not listed on a designated stock exchange, the fair market value of that share on that day,

iii.  an interest in immovable property, the fair market value of that interest on that day, less the amount of any debt bearing a reasonable rate of interest incurred by the registered charity in respect of the acquisition of that interest and secured by the immovable property or the interest therein,

iv.  property that has been pledged, nil,

v.  an interest in property where the registered charity does not have the present use or enjoyment of the interest, nil,

vi.  a life insurance policy in force, other than an annuity contract, nil, or

vii.  property other than property described in subparagraphs i to vi, the fair market value of the property on that day; or

(c)  in the case of property described in subparagraph b that is either property owned in connection with the charitable activities of the registered charity and is a share of a limited-dividend housing company referred to in paragraph c of section 998 of the Act or a debt arising from a loan, or property that has ceased to be used for charitable purposes and is being held pending disposition or pending use for charitable purposes, or property that has been acquired for use for charitable purposes, the lesser of the fair market value of the property on that day and the amount determined in accordance with the following formula:

(A/0.035) × (12/B).

In the formula in subparagraph c of the first paragraph,

(a)  A is the income earned from the property during the period; and

(b)  B is the number of months in the period.

For the purposes of the first paragraph, the Minister may accept, as a method for determining the fair market value of property or a portion thereof on the last day of a period, an appraisal made by an independent expert,

(a)  in the case of property described in subparagraph ii or iii of subparagraph b of the first paragraph, not more than 3 years before that day; or

(b)  in the case of property described in subparagraph a or c of the first paragraph or in subparagraph vii of subparagraph b of the first paragraph, not more than 1 year before that day.

O.C. 1176-2010, s. 36; O.C. 701-2013, s. 53.

2012-09-01

985.9R3. For the purposes of the first paragraph of section 985.9R2, the value of property or a portion thereof owned by a charitable foundation and not directly used in charitable activities or in administration on the last day of a period must be determined as of that day and must be equal to,

(a)  in the case of a non-qualified investment, its fair market value on that day or its cost amount to the foundation, whichever is greater;

(b)  subject to subparagraph c, in the case of property other than a non-qualified investment that is

i.  a share of a corporation that is listed on a designated stock exchange, the closing price or the average of the bid and asked prices of that share on that day or, if there is no closing price or bid and asked prices on that day, on the last preceding day for which there was a closing price or an average of the bid and asked prices,

ii.  a share of a corporation that is not listed on a designated stock exchange, the fair market value of that share on that day,

iii.  an interest in immovable property, the fair market value of that interest on that day, less the amount of any debt bearing a reasonable rate of interest incurred by the foundation in respect of the acquisition of that interest and secured by the immovable property or the interest therein,

iv.  property that has been pledged, nil,

v.  an interest in property where the foundation does not have the present use or enjoyment of the interest, nil,

vi.  a life insurance policy in force, other than an annuity contract, nil, or

vii.  property other than property described in subparagraphs i to vi, the fair market value of the property on that day; or

(c)  in the case of property described in subparagraph b that is either property owned in connection with the charitable activities of the foundation and is a share of a limited-dividend housing company or a debt arising from a loan, or property that has ceased to be used for charitable purposes and is being held pending disposition or pending use for charitable purposes, or property that has been acquired for use for charitable purposes, the lesser of the fair market value of the property on that day and the amount determined in accordance with the following formula:

(A/0.045) × (12/B).

In the formula in subparagraph c of the first paragraph,

(a)  A is the income earned from the property during the period; and

(b)  B is the number of months in the period.

For the purposes of the first paragraph, the Minister may accept, as a method for determining the fair market value of property or a portion thereof on the last day of a period, an appraisal made by an independent expert,

(a)  in the case of property described in subparagraph ii or iii of subparagraph b of the first paragraph, not more than 3 years before that day; or

(b)  in the case of property described in subparagraph a or c of the first paragraph or in subparagraph vii of subparagraph b of the first paragraph, not more than 1 year before that day.

O.C. 1176-2010, s. 36.