In the context of charitable giving and taxation, a loanback occurs when a donor makes a gift to a qualified donee and within 60 months of making the gift, at least one of the following two situations occur. These situations have the effect of reducing the fair market value of the gift for income tax purposes.

Situation one:

Situation two:


Separate rules may also apply to reduce the eligible amount of the gift where an advantage is received in respect of a gift.
These are complex provisions. If necessary, we recommend obtaining advice from legal or accounting experts.

How is the value of the gift affected?

When the loanback provisions apply, the qualified donee that receives the gift should reduce the amount that would otherwise be reported on the official receipt that it may issue, according to the two possible situations as follows:

Situation one:

Situation two:

When the loanback provisions take effect after the qualified donee issues a receipt for income tax purposes, the qualified donee should issue a revised receipt to reflect the fair market value as adjusted by the provisions described above. The revised receipt must contain all the required information plus a notation stating that it "cancels and replaces receipt #" (insert the serial number of the previous receipt, which should be marked "cancelled").

The qualified donee's copy of the previous receipt must be kept in the usual manner. A copy of the amended receipt should also be sent to the donor. The donor should then, where necessary, file an adjustment request with the Canada Revenue Agency to amend any return that they have already filed based on the previous receipt.


If the gift is a non-qualifying security, the gift must be an excepted gift before the loanback rules apply. Otherwise, the rules relating to a donation of a non-qualifying security apply. For more information, see Non-qualifying securities.

A non-qualifying security is considered to be an excepted gift if it meets all of the following criteria:

Related topics


Page details

Date modified: