Standard 10: Tax Benefits and Appraisals

“Land trusts work diligently to see that every charitable gift of land or conservation agreement meets provincial and federal tax law requirements, to avoid fraudulent or abusive transactions and to uphold public confidence in land conservation.”

 

Practices:

A. Landowner Notification
  1. Inform potential land or conservation agreement donors who may claim a provincial or federal income tax deduction or credit, in writing and early in project discussions, of the following:
    1. Canada Revenue Agency strongly recommends an independent appraisal prepared by a qualified appraiser for gifts of property valued at more than $1,000, including information on the timing of the appraisal.
    2. As the beneficiary of the tax receipt, the donor has primary responsibilities for any determination of the value of the donation (even in the case where the appraisal has been arranged for or commissioned by the land trust).
    3. An independent appraiser who is certified by the appraisal institute of Canada and who follows the Canadian Uniform Standards of Professional Appraisal Practice should perform the appraisal, or, in Québec, Les norms de pratique professionnelle des évaluateurs agréés (Le normes de pratique).
    4. The land trust requires a copy of the completed appraisal in order to issue a charitable donation request.
    5. The land trust will not participate in projects where it has significant concerns about the potential for false receipting, tax avoidance, tax abuse or tax fraud.
  2. Where appropriate, inform potential donors about the Ecological Gifts Program including
    1. The increased tax benefits associated with making a gift under the program.
    2. The consequences of unauthorized disposition or change in land use of ecological gifts.
    3. That appraisals of ecological gifts must comply with the Ecological Gifts Program Guidelines for Appraisals and will be reviewed independently by the Appraisal Review Panel.
  3. Do not make assurances as to:
    1. Individualized legal or tax implications.
    2. Whether a particular land or conservation agreement donation will be eligible for a donation tax deduction or credit.
    3. What monetary value of the donation the Canada Revenue Agency and / or province will accept.
    4. What the resulting tax benefits of the deduction or credit will be, if any.

Resources:

Directory of Certified Specialists in Real Estate Law & Estates and Trust Law Law Society of Ontario ———– ——————- website
Engaging an Appraiser to Appraise an Ecological Gift Environment Canada 2005 1,083 pdf
Ecological Gift Application Information Ontario Land Trust Alliance 48 word
Ecological Gifts Program Guidelines for Appraisals Environment Canada 2017 ——————- website
Appraiser Directory Appraisal Institute of Canada ———– ——————- website
Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) Appraisal Institute of Canada 2020 ——————— website
File Name Organization Year Size Format
B. Legal Requirements: Land Trust Responsibilities
  1. If the land trust holds charitable donations of land or conservation agreements, it meets the requirements for a qualified donee under the applicable provisions of the Income Tax Act.
  2. Issue donation tax receipts only in accordance with the provisions of the Income Tax Regulations.

Resources:

File Name Organization Year Size Format
C. Avoiding Fraudulent or Abusive Transactions
  1. Review, on the land trust’s own behalf, each transaction for consistency with provincial and federal income tax deduction or credit requirements.
  2. Evaluate any appraisal to determine whether the land trust has substantial concerns about the appraised value or the appraisal.
  3. Discuss substantial concerns about the appraisal, the appraised value or other terms of the transaction with legal counsel and take appropriate action, such as:
    1. Documenting that the land trust has shared those concerns with the donor.
    2. Seeking additional substantiation of value.
    3. Withdrawing from the transaction prior to closing.

Resources:

File Name Organization Year Size Format