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Canada Tax Credits vs United States Tax Deductions

This article provides a detailed analysis of the similarities and differences between the Canadian and United States Tax Codes pertaining to non-cash charitable contributions of deconstructed building materials and other personal property:

1.Type of Tax Relief:

Canada : offers a tax credit for non-cash charitable donations,
U.S. :while the provides a tax deduction.

2. Capital Gains Treatment:

Canada : Canada provides a more favorable treatment by allowing donations of publicly traded securities and ecologically sensitive land to benefit from a 0% capital gains inclusion rate.
U.S. :In contrast, the U.S. limits deductions for long-term capital gains property to 30% of AGI.

3. Eligible Donation Limits:

Canada : Canada allows charitable donations to claim up to 75% of a taxpayer’s net income (with certain exceptions allowing up to 100%),
U.S. : whereas in the U.S., donations can be deducted up to 50% of a taxpayer’s Adjusted Gross Income (AGI), with some special limitations for specific types of contributions.

4. Appraisal Requirements:

Canada : Canada requires appraisals for non-cash donations exceeding $1,000 and adherence to stricter FMV rules, especially for property acquired within certain periods or as part of a tax shelter
U.S. :In the U.S., donations over $5,000 require a qualified appraisal following strict IRS regulations, including proper documentation and valuation standards.

5. Carryforward Period:

Canada : o Both countries allow for carryforward of unused donations. Canada allows a 5-year carryforward for general donations (10 years for ecologically sensitive land),
U.S. :while the U.S. allows a 5-year carryforward for non-cash donations.

6. Deemed Fair Market Value Rules:

Canada : Canada imposes stricter deemed FMV rules on property donated as part of a tax shelter or acquired within 3 years of the donation.
U.S. :In the U.S., FMV is also scrutinized, but with adjustments for appreciated property, and extensive reporting is required for compliance.

7. Nonprofit Regulations:

Canada : Canada closely monitors the relationship between appraisers, donors, and nonprofits to prevent conflicts of interest.
U.S. :The U.S. system has faced issues with nonprofits using captive appraisers, leading to inflated appraisals and IRS audits, a lesson Canada is learning from as it implements its own regulations.

These differences highlight Canada’s more cautious and regulated approach, aiming to prevent the valuation abuses seen in the U.S.

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Meet our Canadian Valuation Team

Jessica Marschall and The Green Mission Inc team are partnering with Brad Reimer, President of Ancore Appraisals Inc.

Jessica I. Marschall, CPA, ISA AM

As the CEO of The Green Mission Inc. and Probity Appraisal Group, and an IRS Qualified Appraiser accredited through the International Society of Appraisers, Jessica has over five years of experience setting the highest standards for deconstruction valuations. She has completed personal property appraisal training with the International Society of Appraisers, as well as American Society of Appraisers and is a member of their Washington, DC group and graduated from CASP training with the Appraisers Association of America. She maintains extensive continuing education credits from both CPA and personal property appraisal organizations.

With 24 years as a practicing CPA and President of MAS LLC, a tax consultancy firm, she brings deep expertise to her work. Outside of her professional life, Jessica and her husband are the proud parents of five children—each of whom brings a level of complexity that rivals even the most challenging IRS regulations!

Brad Reimer

While completing his education in UBC’s Urban Land Economics program, Brad began his journey as an appraiser in 2005, working for a large firm that dealt primarily with mortgage lenders and worked there for 13 years, completing over 8000 appraisals. In 2018 Brad went on to open Ancore Appraisals Inc, a boutique appraisal firm that specializes in appraisals for private individuals, law firms, the federal government relocation program, and the deconstruction industry.

Brad is an experienced residential appraiser and has completed a wide range of valuation assignments along with a variety of consulting assignments in rural and urban environments, and continues to help pioneer the deconstruction industry in Canada.

Brad has been a member in good standing with the Appraisal Institute of Canada (AIC) since 2005 as well as the Fraser Valley Real Estate Board.

Brad has been married since 2007 to his wife Juliana and has two children. When he isn’t coaching soccer, he can be found on the mats training and competing in Brazilian jiu-jitsu.

TGMI Canada—Bringing Expert Deconstruction and Donation Valuation to Canada with Trusted Personal Property Qualified Appraisers