CRA Donation Receipt rules for Auctions.
The CRA imposes rules for the charitable donation receipts for Auctions. The item donor and the winning bidder are both eligible for a donation receipt within the following rules and parameters.
In general, the item donor can receive a receipt for the "Fair Market Value" of the item donated. The buyer (Auction winner) receives a receipt for the difference between the "Fair Market Value" and the purchase price.
- A receipt can be issued to the donor for the fair market value of the item at the time it is donated to the charity.
- The donated item may be subject to the deemed fair market value rule.
- If the fair market value of the donated item cannot be established, you cannot issue a receipt.
- The fair market value of the item must be established and made known to all bidders in advance of the auction, or you cannot issue a receipt.
- The winning bid must meet the intention to make a gift threshold (the posted value of the item cannot exceed 80% of the winning bid).
- Fair market value is usually the highest dollar value you can get for your property in an open and unrestricted market and between a willing buyer and a willing seller who are knowledgeable, informed, and acting independently of each other.
- Click here for CRA explanation of What is deemed fair market value
Calculation of eligible amount