Anyone heard of Destiny Health - Save taxes through charitable health donations?

[photon]

http://www.destinygrp.ca/destiny-foundation.php
http://www.universaldonations.com/

Apparently you can contribute to this health foundation or something and somehow they come up with a tax receipt that gives you a tax credit of MORE than you contributed. For example they say that for $1,000 contribution, I can get a tax credit of $2,296!

Definitely triggers my "too good to be true" detector. Plus this is the sales person's personal site:

http://www.yoursuccesssecrets.com/



The only thing I can find is this:

http://communications.uwo.ca/making_...e/061128-4.htm

Anyone heard about stuff like this?

[photon]

After a little more digging:

http://www.cra-arc.gc.ca/newsroom/al...a061031-e.html

Does that sound like it applies in this particular setup?

[I_H8_Crawford]

If you didn't actually pay that full amount, you can't write it off.

Well, you can, just pray you don't get audited or you're screwed.

Personally I'd try my luck with that nice man in Nigeria who has a bundle of money for me if I pay the transfer fees before I mess around with the CRA.

[I_H8_Crawford]

http://money.canoe.ca/PersonalFinanc...09292-sun.html

It's an arrangement that instantly sends up red flags at the CRA. "You can never get a deduction for more than you put in . . . If it looks too good to be true, it probably is," said CRA spokesperson Colette Gentes-Hawn.

Hope this article helps.

[photon]

Nice, thanks.

I just hope the friends who passed this "awesome contact" onto us haven't gave them too much $$...

Or I guess one could do it and bank the benifit for 3 years and hope for no audit.

[photon]

Bump for the morning crowd.

[Slava]

I have been approached to sell this type of shelter numerous times. Honestly, you can write off anything...but one day you may have to justify those items which is where this gets ugly!

My understanding is that CRA is not particularly fond of these ways to contribute $1000 and get a deduction of $3000. (Some are higher than this!). When I say not fond, I really mean to say that this is not legal. I know that there are lawyers and accountants involved (allegedly) who say this is totally legal and the like, but do you really want to be the guy who has to fight this battle?

Just my thoughts on these things...you can reduce your taxes legitimately a number of different ways, and not have to fear that CRA is going to audit you!

[Tiger]

From what I understand (I know some people who do this), your donation is actually buying medical supplies at cost, then you donate the medical supplies at 'fair market value' instead of cost therefore you donation reciept is greater than your actual donation

[mykalberta]

Originally Posted by Tiger

From what I understand (I know some people who do this), your donation is actually buying medical supplies at cost, then you donate the medical supplies at 'fair market value' instead of cost therefore you donation reciept is greater than your actual donation

My friend does this, and this is the line he gives.

I dont have enough disposable income to go up against the CRA if they were to audit me on this stuff. He used the food example instead of medical supplies but same thing I would assume.

MYK

[corporatejay]

at the risk of putting it bluntly, don't f$$k with the CRA, you will lose.

[photon]

Originally Posted by Tiger

From what I understand (I know some people who do this), your donation is actually buying medical supplies at cost, then you donate the medical supplies at 'fair market value' instead of cost therefore you donation reciept is greater than your actual donation

Yeah, I talked with an accountant about this and that's what he said. He said they use trusts, foundations, and all kinds of other legal convolutions to try and make it legal.

He said the CRA's position is basically if your tax benifit is greater than your actual contribution then the benifit isn't allowed.. and if you get a benifit from your charitable donation (in the forum of medical supplies) that is worth more than your contribution, then the contribution is reduced by the same amount.

He said that he's had a # of clients that have tried this and been denied, or tried and got audited later and had it all clawed back with interest. He also said the current groups doing it obviously think their setups will pass the law, and until specific setups go through courts then there's no way to know for sure, but given the history and the fact that doing this basically takes money directly out of CRA coffers (I contribte $1000 and get a $2200 tax refund), it's not likely to go on.

So yeah it boils down to do I want to take the risk of having to fight CRA or face having to give back money down the road.

[grambo]

This is actually not that new of a scam, but the scammers are always changing the specifics and coming up with new variables. It never works. The CRA's position is clear on this very issue, you cannot deduct more than your donation, you cannot deduct FMV over your contribution, especially if it is in cash! If you contributed a non-monetary asset you could argue valution I think (I'm a CA but not a tax lawyer, I don't know about this).

Anyone who contributes to this is in for a surprise if they get audited, and I'm sure the CRA filters donations to known 'charities' that use this scheme in their software, so be ready. I really hope these scammers are not making commissions on selling this tax advice.

[MoneyGuy]

If it sounds too good to be true, it probably is applies here. I warn my clients against schemes such as this.

I this about sums it up:

Originally Posted by corporatejay

at the risk of putting it bluntly, don't f$$k with the CRA, you will lose.

[Mccree]

The thing I do not get is why you do not have an income inclusion on the donations of medical supplies. IE You donate $1000, get a tax receipt for 3,000. So don't you have $2,000 of income to include on your tax return.

[Lurch]

The thing I do not get is why you do not have an income inclusion on the donations of medical supplies. IE You donate $1000, get a tax receipt for 3,000. So don't you have $2,000 of income to include on your tax return.

Typically you do. There is a capital gain on the medical items, but since that is taxed at 50% of income, you come out ahead on the net. And as a note, CRA has specifically disallowed these deductions as of last year, so anyone attempting to use them, regardless of whether the company has slightly modified the product to attempt to exploit the concept, will with 99% certainty have the deduction disallowed.