In 2003, the Income Tax Act was amended to clarify that the donation amount for which a tax credit is based upon must be reduced by any “advantage” related to the gift. Taxpayers should be on the lookout for this buy-low, donate-high arrangement; many believe because they receive a tax shelter identification number from the promoters, they can claim tax benefits. Not so says the CRA, such numbers only mean that the CRA can identify all tax shelters and those using them.  

 

The Canadian Securities Administrators is urging investors to investigate further when they see investment opportunities advertised in the media. They recommend that one way to avoid problems is to get professional tax advice from someone not affiliated with the promoters.  

 

Click here for the CRA news release.

Click here to read Jonathan Chevreau’s article in the National Post (November 21, 2006)

 

For more information on tax shelters visit the CRA website,

For more information on the Income Tax Act visit Department of Justice website.