•It used to be
necessary to comply with both an 80% DQ and a
3.5% DQ, but now only necessary to comply with
3.5% DQ
–3.5% DQ
generally means 3.5% of investment assets,
based on the average value of assets in 24 months immediately preceding the taxation year
–3.5% DQ does
not apply to charitable organizations
with investments of $100,000 or less ($25,000
threshold remains for foundations)
•There are now
complicated rules for inter-charity transfers
between non-arms length charities
–As such, it may
be necessary to make an inter-charity
gift between non-arm’s length charities a “designated gift” in order to avoid a 100% expenditure requirement