In the case of a conditional donation, what is true regarding donor's tax?

In the scenario of a conditional donation, the understanding of donor's tax hinges on the nature of the donation itself. When a condition is attached to a donation, it does not negate the applicability of donor's tax at the time of the gift. The donor's tax is assessed based on the transfer of ownership at the moment the gift is made, regardless of whether the condition attached is fulfilled.

Consequently, if a conditional donation is made and the tax is applicable, it will still be owed even if the recipient may not end up keeping the gift due to the unmet condition. The key point is that the tax liability arises from the act of gifting itself, not its fulfillment or potential revocation. This reflects the principle that the donor's intent to make a gift creates a tax obligation, establishing the basis for donor's tax at the time of the transfer, irrespective of any further conditions that may affect the final ownership of the asset.