In a nutshell, if your tax return includes some U.S. source income, such as U.S. dividends for example, you can claim your gifts to U.S. charities up to 75 per cent of the net U.S. income you reported on your Canadian return. In a couple of cases, however, you may be able to claim your U.S. gifts up to 75 per cent of your worldwide net income. The first situation is if you live in Canada, but near the U.S. border, throughout the year and commute to your principal workplace or business in the U.S., provided that U.S. employment or business was your main source of income for the year. Secondly, your U.S. donation claim won’t be limited to only your net U.S. income if your gift was made to a U.S. college or university at which you or a family member either is or was enrolled, or if your gift is to a prescribed U.S. university “the student body of which ordinarily includes students from Canada.”

—————————–

The tax treaty between Canada and the U.S. provides some limited tax relief for gifts made by Canadians to U.S. charitable organizations, but the rules are slightly complicated.

Our tax system offers generous benefits to donors who choose to make gifts to registered charities. Individuals can claim both federal and provincial tax credits worth up to 50 per cent of the amount donated, depending on your province of residence. Corporations can claim a deduction from their taxable income for qualifying donations. In both cases, the amount that can be claimed is limited to 75 per cent of net income for the year.

So, what exactly constitutes a valid donation?

How to get a tax deduction for donations to U.S. charities

Well for starters, the gift must be made to a registered charity, which is defined as a charitable organization, public or private foundation that is resident in Canada and that has obtained official Canada Revenue Agency registered status. As of this week, there are 85,881 registered charities in Canada.

You can find out whether the charity you wish to benefit is registered by visiting the CRA’s website (cra-arc.gc.ca) and on the “Charities and giving” page, going to the “Charities Search” box.

But what if you make a donation to a U.S. charity?

You’re in luck, since the tax treaty between Canada and the U.S. does provide some limited tax relief for gifts made by Canadian residents and corporations to U.S. charitable organizations, but the rules are slightly complicated.

In a nutshell, if your tax return includes some U.S. source income, such as U.S. dividends for example, you can claim your gifts to U.S. charities up to 75 per cent of the net U.S. income you reported on your Canadian return. In a couple of cases, however, you may be able to claim your U.S. gifts up to 75 per cent of your worldwide net income. The first situation is if you live in Canada, but near the U.S. border, throughout the year and commute to your principal workplace or business in the U.S., provided that U.S. employment or business was your main source of income for the year. Secondly, your U.S. donation claim won’t be limited to only your net U.S. income if your gift was made to a U.S. college or university at which you or a family member either is or was enrolled, or if your gift is to a prescribed U.S. university “the student body of which ordinarily includes students from Canada.”

A recent decision from the Court of Quebec, however, spells trouble for Quebec donors looking to donate money to U.S. charities. The court ruled that a Quebec manufacturing company was precluded from claiming nearly $500,000 worth of U.S. donations on its Quebec return against its U.S. source income, finding that the section of the Canada-U.S. tax treaty that would otherwise allow the claim doesn’t apply to Quebec since Quebec is not a party to the Treaty.

Troy McEachren, a tax partner with Miller Thomson LLP in Montreal, called the court’s interpretation “problematic” in a case comment issued this week. He argues that the interpretation is “overly technical and ignores the purpose of the provision, which is to permit the application to Quebec’s fiscal legislation of the effects of tax treaties entered into by Canada.”

Fortunately for Quebec donors, the company has appealed the decision to the Court of Appeal of Quebec. So, stay tuned, but in the meantime, Quebec donors may wish to tread cautiously.

 Click here to read the full article

_{Legal Notice: Opinions in this blog post do not reflect the opinion or endorsement of Charity Exchange or its affiliates. The opinions in this post should not be used as legal or financial advice for any financial decision. The advice or opinions shared in this blog post are solely those of the author and are not the opinion of Charity Exchange or its affiliates. For legal or financial advice, always consult with your financial advisor or legal council.}

The post How to get a tax deduction for donations to U.S. charities appeared first on Charity Exchange.

Would you like to send charitable funds to a Yeshiva, seminary, Shul, Chessed organization, school, camp, or any other charitable organization outside your home country? Do you run a charity and have Donors in other countries who would like to make a tax-deductible donation to your charity?

Charity Exchange Can help! Charity Exchange’s new and revolutionary method of cross border donations can help donors and charities make tax-deductible donations to charities abroad.

Charity Exchange’s charitable foundation and Donor Advised Fund operates in the USA, Canada and Israel. The Foundation offers a Global Donation Matching program. The Global Donation Matching program is a great tool for donors to use when seeking to support charities outside their home country. The benefit of donating to the foundation and using the donation matching program, is that all donations are tax-deductible. Donors receive a tax-deductible receipt for funds deposited to their Donor Advised Fund Account.

How does the matching donation program work?

The concept of the global matching donation program is to pair two (or more) donors from different countries and match their donations. Each donor’s donation supports the other donor’s charity.

Here is an example of how it works.

Justin, from Montreal Canada, wants to make a $1,300 CAD donation to the American Red Cross. Justin sets up an account and creates a $1,300 donation to be matched and sent to the American Red Cross. The donation is pending on the charity exchange platform until a matching donation is found in the USA.

How is a matching donation found?

Joe, from Washington DC in the USA, wants to make a $1,000 USD donation to Feed the Poor Canada organization. Joe creates a $1,000 donation to be matched and sent to Feed the Poor Canada. The donation is instantly matched with Justin’s pending donation to the American Red Cross.

The result, Justin from Canada’s $1,300 CAD donation is sent to Feed the Poor Canada to support Joe’s, from Washington, selected charity. And Joe from Washington $1,000 USD donation is sent to the American Red Cross to support Justin’s, from Canada, selected charity. Essentially the donors exchange donations by making a recommendation (to the Donor Advised fund) to donate their funds to the charity the other donor selected.

To use the service, the donor would need to open a Charity Exchange account and deposit a donation to their Donor Advised Fund account. Once the funds are donated and cleared in the Donor’s account the donor can recommend a donation to any registered charity in the countries Charity Exchange operates in using the matching donation program. Charity Exchange operates in Canada, Israel, and the USA.

Is personal information kept private?

Yes, the donor’s personal information is strictly private and confidential. When a donation match is made and paired with another donor’s donation the donors do not see who they are matched with. Only the receiving charity can see the donor who selected their charity for their donation but not the other donor. Charity Exchange has a strict privacy policy and does not share personal information with any other party.

Are there other unique features offered by Charity Exchange?

Yes. We accept Bitcoin and other Crypto currency donations

Crypto currency donations are an emerging trend for charitable giving. More and more donors are looking to donate crypto to their favourite charities. However, many charities do not have the know how or the tools to accept crypto donations.

Charity Exchange provides a platform for donors and charities to donate and accept crypto currency. Donors deposit their crypto currency into their Donor Advised Fund account and receive a tax-deductible receipt for the fair market value of their crypto currency. Donors then gift the donation to any registered charity in the countries Charity Exchange operates in.

Can Charities Use the Crypto Donate service to accept donations?

Yes. Charities can open a Charity Exchange account and direct donors to their charity profile page on the Charity Exchange platform. Charities can also track the incoming donations and send thank you letters to donors directly from their charity account.

How does Charity Exchange accept crypto currency? 

Charity Exchange currently accepts three types of crypto currency, BITCOIN, ETHEREUM and USDC. Donors deposit crypto currency into their Donor Advised Fund account. Once the deposit is complete, charity exchange converts the crypto currency to USDC and redeems the USDC crypto currency for the local fiat currency. In the US it is converted to USD, in Canada to CAD and in Israel to Israeli Shekels. This process helps avoid potential fluctuations in the market and stabilize the value of the crypto currency. It ensure that the charity receive the maximum financial value intended by the donor at the time of the gift.  It also allows the donor to put the funds to use immediately.

To sign up or to learn more about the matching donation program or crypto donations visit www.charity.exchange

_{Legal Notice: Opinions in this blog post do not reflect the opinion or endorsement of Charity Exchange or its affiliates. The opinions in this post should not be used as legal or financial advice for any financial decision. The advice or opinions shared in this blog post are solely those of the author and are not the opinion of Charity Exchange or its affiliates. For legal or financial advice, always consult with your financial advisor or legal council.}

The post Tax-Deductible Donations to Yeshiva or Seminary in Israel, Canada or USA appeared first on Charity Exchange.

Use the Charity Exchange matching donation program.

Charity Exchange charitable foundation and Donor Advised Fund operates in the USA, Canada and Israel. The Foundation also offers a Global Matching Donation program. The Global Matching Donation program is a great tool for donors to use when seeking to support global charities and charities across the border. The benefit of donating to the foundation and using the Donor Advised Fund and or the donation matching program, is that all donations are tax-deductible. Donors receive a tax-deductible receipt for funds deposited to the foundation.

How does the matching donation program work?

The concept of the global matching donation program is to pair 2 donors from different countries and match their donations. Each donor’s donation supports the other donor’s charity. Below is an example of how it works.

Justin, from Montreal Canada, wants to make $1,300 CAD donation to the American Red Cross. Justin creates a $1,300 pending donation to be matched and sent to the American Red Cross. The donation is pending on the charity exchange’s platform until a match from a US donor is found.

Joe, from Washington DC in the USA, wants to make a $1,000 USD donation to Canada’s Feed the Poor organization. Joe creates a $1,000 pending donation match to Canada’s Feed the Poor. The pending donation is instantly matched with Justin’s pending donation to the American Red Cross.

The result, Justin from Canada’s $1,300 CAD donation is sent to Canada’s Feed the Poor to support Joe from Washington’s selected charity. And Joe from Washington DC’s $1,000 USD donation is sent to the American Red Cross to support Justin from Canada’s selected charity. Essentially the donor makes a recommendation to the Donor Advised fund to donate their funds to the charity the other donor selected.

To use the donation matching program, the donor would need to open a Charity Exchange account and make a deposit / donation to the Donor Advised Fund. Once the funds are donated and cleared in the Donor’s DAF account the donor can recommend a donation to any charity in the country of residence or in the countries Charity Exchange operates in using the donation matching program.

To learn more about the donation matching program visit our FAQ page or watch a short how to video here.

_{Legal Notice: Opinions in this blog post do not reflect the opinion or endorsement of Charity Exchange or its affiliates. The opinions in this post should not be used as legal or financial advice for any financial decision. The advice or opinions shared in this blog post are solely those of the author and are not the opinion of Charity Exchange or its affiliates. For legal or financial advice, always consult with your financial advisor or legal council.}

The post Can a US resident make a tax-deductible donation to a Canadian Charity? appeared first on Charity Exchange.