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Tax Exemption

Cottage Dreams is able to issue a tax receipt for all donations received. Working with the Charities Directorate at Canada Revenue Agency, we have determined that in order to receive a tax receipt for your participation, Cottage Dreams will rent your cottage for the agreed upon week and we ask that you donate the same amount back. The receipt will be issued for this amount. The amount is based on a fair market value.

Please note that CCRA (Canada Customs and Revenue Agency) considers each rental amount as personal income. We ask that you advise us if you would prefer to forgo the receipting process before agreement of a placement.

The following was prepared by Thomas Barlow, a partner at a Toronto law firm and member of Cottage Dreams’ Board of Directors as a guideline and does not constitute legal or tax advice. The circumstances of each individual taxpayer may vary. Taxpayers are required to consult their own legal and tax advisors.

  • Tax receipts cannot be given for services or the imputed value of rental income.
  • Under the Income Tax Act, a gift for which a receipt can be issued must be a voluntary transfer of property for no consideration. Contributions of services or imputed rental income are not considered property.
  • Therefore, for a tax receipt to be issued: Cottage Dreams must pay for the rental of the cottage at an amount that does not exceed what the fair market rental would be if Cottage Dreams had to go out and actually rent the property; and, the cottage owner/donor must give a donation in an equivalent amount.
  • The donor in this situation is also supposed to include the rental income in his/her income for tax purposes as income from property.
  • The donor is not obligated to receive a tax receipt for the donation of their cottage week.
  • If you have any questions, you may contact the Charities Directorate at 1-800-267-2384.

This information does not constitute legal or tax advice and the circumstances of individual taxpayers may vary.Taxpayers are required to consult their own legal and tax advisors.

W. Thomas Barlow
Partner
Fasken Martineau DuMoulin LLP
Barristers and Solicitors