For complete details, refer to the following documentation from the CRA:
Issuing receipts for auctions
Fundraising events - issuing receipts
Deemed fair market value rule
Determining fair market value of non-cash gifts
Donation of gift certificates or gift cards
Income Tax Folio S7-F1-C1 §1.16
When should a charity issue a receipt
Hosting a charity auction for the first time? The CRA outlines some requirements for auction donation receipts. Without a compliant auction receipt, your donors can’t get (their much desired) tax deductions from their donations.
Use our Auction Receipt Checklist for Canadian Auctions to ensure your receipts are fully compliant with CRA laws.
Skip the Checklist - Get Automatic Compliance Receipting
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Create Your Auction for FreeHow to Determine the FMV of Auction Items & Experiences
You’ll have to determine the FMV of your auction items to issue receipts.
FMV means Fair Market Value. It’s the price the item is worth, or more specifically, the price the item would sell for on the market.
It can be tricky to assign FMVs, especially for unique items like signed jerseys or lunch with a CEO. Here are the CRA’s rules for FMVs:
- If the donor obtained the item within the last 3 years: The FMV is whichever is less: the normal selling price or the donor’s “cost basis” (the price the donor paid to buy the item). Ask the donor for these numbers and do your due diligence if it’s suspiciously high.
- If the item is worth <$1,000: An educated guess from someone who is “competent and qualified” is enough to determine FMV. For common items, a staff member is “competent and qualified” enough to assign a value.
- If the item is worth >$1,000: The CRA “strongly recommends” the item be professionally appraised. Don’t forget to keep documentation.
- If the item is a personal item or personal service: The FMV is the same as the winning bid, meaning both the item donor and item winner do NOT get a deduction. Examples would be a pro golfer offering to play a round of golf with the highest bidder or a signed hockey jersey with no clear value.
Auction Receipt Checklist
The CRA defines when you can issue an auction receipt and what should be included in auction receipts. It also has different requirements for receipts to donors who donate items for auctioning and for receipts to donors who win items from bidding. Everything is covered in our two checklists below.
In instances where you can’t issue a receipt, consider explaining to your donors why they can’t receive a deduction. It could save you from receiving calls from frustrated donors during tax season.
Item Donor Receipt Checklist:
Requirements to issue an official donation receipt:
✔ An FMV can be determined for this item/experience
✔ For gift cards donated by a business: The card has been redeemed by the winner*
In your receipt, include:
✔ Your organization’s name
✔ Your charity registration number
✔ Date of the contribution
✔ The donor’s name
✔ The donor’s address
✔ Name of the donated item/experience
✔ Authorized signature
✔ FMV of the item/experience
*Gift cards donated by an individual for an auction can be receipted as usual at the time of the donation.
Item Winner Receipt Checklist:
Requirements to issue an official donation receipt:
✔ An FMV can be determined for this item/experience
✔ The FMV of this item/experience was declared to donors before auctioning began
✔ The winning bid meets the “gift threshold” (the FMV of the item is 80% or less of the winning bid)
In your receipt, include:
✔ Your organization’s name
✔ Your charity registration number
✔ Date of the contribution
✔ The donor’s name
✔ The donor’s address
✔ Name of the donated item/experience
✔ Authorized signature
✔ FMV of the item/experience
✔ The item/experience’s “eligible amount” (The amount paid above the FMV)
Frequently Asked Questions
How much of a tax deduction do item donors receive?
Item donors receive the item’s full FMV as a tax deduction.
How much of a tax deduction do item winners receive?
Item winners receive a tax deduction for the amount paid above the item’s FMV (the eligible amount).
What about direct donation receipts?
Send a receipt as you typically would for any monetary donation.
What about event ticket receipts?
Event tickets are NOT tax deductible when the service provided (the event experience, i.e. dinner, DJ, complimentary items, etc.) is worth the same as the ticket price.
BUT if the price of tickets was more than the value of the event experience, then there is a deductible amount and you can issue a receipt. So if your event experience's FMV is $100, but you charged $300 for tickets, the deductible amount is $200.
What's the deadline for sending auction receipts?
There’s no deadline for issuing donation receipts, but the CRA recommends sending receipts by February 28 of the following year.
What other records are important for auctions?
You’ll want to track key data through automated auction reports after your auction closes: financial summary, item performance, bidder activity, attendee statistics, and marketing report. Check your reporting or analytics dashboard in your software for these.
Automatic Compliance Receipting
CharityAuctions.com automatically emails receipts to donors after your auction. Our receipts are built to meet CRA requirements (no checklist needed).
Simply choose your country and toggle our Tax Receipt feature. Add your own custom message if you’d like, and you’re all set.
Register now to create your auction for free.
Or learn more about Auction Analytics and Reporting.
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