An advantage is the total fair market value of all property, services, compensation, or other benefits that a donor receives or is entitled to receive in return for making a gift. The benefits may be contingent or receivable in the future, by either the donor or any person or partnership not dealing at arm's length with the donor.
Determining the fair market value of an advantage is similar to determining the fair market value of a gift in kind. However, while only property is a gift in kind, all types of advantage (for example services, accommodation, use of property) must be valued.
An advantage also includes any limited-recourse debt in respect of the gift. However, the calculation of an advantage does not include taxes such as GST, PST, or HST. As well, it does not include gratuities, unless they are included in the cost and are not discretionary.
For more information, see Pamphlet P113, Gifts and Income Tax.
Finance and Administration