Summary Policy

Date
September 3, 2003

Reference Number
CSP - P19

Key Words
Property (disposition) - Capital gain

Policy Statement

Under the Income Tax Act, when a taxpayer (i.e., an individual or a corporation) disposes of property by way of a gift to a qualified donee, the taxpayer is deemed to have proceeds of disposition equal to the fair market value of the property at the time of the gift. If the fair market value of the property exceeds its adjusted cost base, the taxpayer will realize a capital gain as a result of such a disposition.

References

• Fair Market Value, CSP - F07.
• Gift, CSP - G01.
• Property, CSP - P05.
• Disposition of Property, CIL-2000-009.
• Capital Gains, T4037.
• Capital Gains on Gifts of Certain Capital Property, T1170.
• Gifts and Income Tax, P113.
• Gifts of Capital Properties to Charity and Others, IT-288.
• Registered Charities and the Income Tax Act, RC4108.
• Income Tax Act, R.S.C. 1985 (5^th supp.) c. 1, s. 38, ss. 110.1(3), 118.1(6) and subpara. 69(1)(b)(ii).