Summary Policy

Date
November 3, 2005

Reference Number
CSP - C25

Key Words
Capital gains pool - Capital gains reduction

Policy Statement

The capital gains pool of a registered charity for a fiscal period is the amount by which the total amount of declared capital gains of the charity from the disposition of enduring property (other than a capital gain from the disposition of a bequest or an inheritance received by the charity in a fiscal period that included any time before 1994) exceeds the amount claimed by the charity as a capital gains reduction.

The capital gains reduction of a registered charity is the lesser of

• 3.5% of the average value of property owned by a registered charity and not used directly in charitable activities or administration at any time in the 24 months immediately preceding a fiscal period; and
  
  
• the capital gains pool of the charity for the fiscal period.

If the average value of property referred to above is $25,000 or less, the capital gains reduction of the charity is deemed to be nil.

References

• Enduring Property, CSP-E10.
• Return - Registered Charity Information Return, CSP-R10.
• Completing the Registered Charity Information Return, T4033A.
• Registered Charities and the Income Tax Act, RC4108.
• Capital Gains and Disbursement Quota Worksheet, T1259.
• Registered Charity Information Return, T3010A.
• Income Tax Act, R.S.C. 1985 (5^th supp.) c. 1, ss. 149.1(1).