[BCMA] Federal Budget proposes change to rules regarding collection donations

[Moderated BCMA subscriber listserv.]

Courtesy of Canadian Art magazine's weekly newsletter of February 13, 2014 :

What Artists & Art Orgs Need to Know About Budget 2014 By Leah Sandals POSTED: FEBRUARY 13, 2014 -


3. There are new guidelines around donations of certified cultural property which could affect art collections of major museums and galleries. Many Canadian art museums and galleries rely on donations of certified cultural property for building their collections. And to date, donors have been rewarded by being able to claim a capital gains exemption on donations of certified cultural property-that is, they are able to receive a tax exemption based on the current value of an artwork, rather than what they originally paid for it. However, Budget 2014 expresses a concern that "certified cultural property could be a target for abuse by tax shelter promoters because of the combination of its favourable tax treatment, inherent uncertainties in appraising the value of art and artifacts, and the exemption from the rule that deems the value of a gift to be no greater than its cost to the donor in certain circumstances." As a result, "Budget 2014 proposes to remove, for certified cultural property acquired as part of a tax shelter gifting arrangement, the exemption from the rule that deems the value of a gift to be no greater than its cost to the donor." This measure is to take effect immediately after budget day. However, the budget notes other donations of certified cultural property-i.e. ones not acquired as part of a tax shelter gifting arrangement-will not be affected by this measure. The results of this measure in the cultural sector are yet to be seen.

- See more at: http://www.canadianart.ca/news/2014/02/13/2014-federal-budget/?utm_medium=email&utm_campaign=Weekly+February+13+2014&utm_content=Weekly+February+13+2014+CID_2d03fef0fd468e80efb4893b2b6648dc&utm_source=E%20Weekly%20Campaign&utm_term=What%20Artists%20%20Arts%20Orgs%20Need%20to%20Know%20about%20the%202014%20Budget#sthash.gFvAc1Fm.dpuf

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