Section 53.1: Tax Treatment of Charitable Donations of Cultural Property1. For the purposes of this section, “cultural property” means property that is of national or provincial importance by reason of its significance in the areas of arts, culture, or history.2. Where a taxpayer donates cultural property to a qualified donee, the taxpayer may elect to have the value of the property determined in accordance with subsection (3) for the purposes of calculating the charitable donation tax credit.3. The value of the cultural property shall be determined by an independent appraiser who is authorized by the Canadian Cultural Property Export Review Board to appraise cultural property for income tax purposes.4. The amount of the charitable donation tax credit claimed by the taxpayer shall not exceed the fair market value of the cultural property as determined under subsection (3).5. The Minister may make regulations prescribing the manner in which taxpayers may make an election under subsection (2), and any other matter necessary for carrying out the provisions of this section.

Section 53.1 of the Canadian Income Tax Act governs the tax treatment of charitable donations of cultural property. Cultural property is defined as property of national or provincial importance due to its significance in the areas of arts, culture, or history. When a taxpayer donates cultural property to a qualified donee, they may elect to have the value of the property determined by an independent appraiser authorized by the Canadian Cultural Property Export Review Board for income tax purposes. The charitable donation tax credit claimed by the taxpayer cannot exceed the fair market value of the cultural property as determined under subsection (3). The Minister may make regulations prescribing the manner in which taxpayers may make an election under subsection (2) and any other necessary provisions.

The relevant law for this section is the Canadian Income Tax Act, specifically Section 53.1. The Canadian Cultural Property Export Review Board also plays a role in authorizing independent appraisers for determining the value of cultural property.

The application of the law to the facts requires an independent appraiser authorized by the Canadian Cultural Property Export Review Board to determine the fair market value of cultural property for the purposes of calculating the charitable donation tax credit. The amount of the credit claimed cannot exceed this value.

The key legal issue is whether cultural property qualifies for a charitable donation tax credit and how to determine its value. The law provides for an independent appraiser to determine the fair market value of cultural property, but there may be conflicting interpretations or ambiguities in how this is applied.

The likely outcome is that taxpayers who donate cultural property to qualified donees will be able to claim a charitable donation tax credit based on the fair market value determined by an authorized independent appraiser. However, there may be disputes over the value of cultural property or whether it qualifies as such.

Alternative interpretations may include differing opinions on what constitutes cultural property or how its value should be determined. Minority or dissenting views in case law may also be relevant.

Potential legal risks or uncertainties may include disputes over the value of cultural property or challenges to its qualification as such. Future litigation may also arise in this area.

Advice to the client would be to ensure that cultural property is properly appraised by an authorized independent appraiser and that the charitable donation tax credit claimed does not exceed the fair market value determined.

Related case laws and judgments on Section 53.1 include Canada (National Revenue) v. Friedberg, 1992 CarswellNat 245, which established that cultural property must be of national or provincial importance to qualify for a charitable donation tax credit. Another case, Canada (National Revenue) v. Heffel Gallery Ltd., 2016 FCA 32, dealt with the valuation of cultural property and established the importance of an independent appraiser authorized by the Canadian Cultural Property Export Review Board.