Testing the contribution
A qualifying donation must fall within a prescribed category and transfer rights, control and ownership to the IPC or qualifying grantmaker. Purpose conditions must satisfy the statutory restrictions. Contractual refund clauses, exclusivity preventing recognition of other contributors and substantive commercial exchanges can prevent donation treatment. A statutory refund obligation is distinguished from a negotiated refund right. Assess the agreement and donor intention before issuing a tax-deductible receipt.
Benefits and sponsorship
A genuine donation accompanied by a benefit can require deduction of the benefit’s value, subject to specified concessions. That rule does not convert a sponsorship into a donation simply because the contribution exceeds the benefit value. Sponsorship has no enhanced donation deduction, although a sponsor may claim an ordinary business expense where the income-production conditions are met. IPCs should not issue donation-deduction receipts for sponsorships. Maintain the classification and benefit valuation so that donor relief matches the actual arrangement.
Official source
A concise, independent Apex Gateway guide based on the official English source, not a reproduction of the complete document. Consult the original for full conditions, exceptions and subsequent updates.
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