We are asked from time to time about the ability of a charity to issue tax receipts for a gift of an item rather than money.
A charity can give tax receipts for donations "in kind" – i.e. anything other than money. The charity is responsible for making sure the receipt is issued for not more than the fair market value of the property.
As a reminder, the CRA's policy statement on this is CSP-F07 (reproduced below):
"Date
September 3, 2003
Reference number
CSP-F07
Key words
Fair market value (appraisal)
Policy statement
The fair market value of a gift in kind as of the date of the donation must be determined before an amount can be recorded on an official donation receipt."
If the fair market value of a gift is $1,000 or less, a qualified staff member of the registered charity receiving the gift can appraise the gift. If the fair market value is more than $1,000, the Charities Directorate strongly recommends that the property be appraised by someone who is not associated with either the donor or the charity receiving the gift (that is, a third party). The person who determines the fair market value of the property must be competent and qualified to evaluate the particular property being transferred by way of a gift. For administrative ease, many organizations decide not to issue such receipts and many donors are happy just to find a place for their gifts where those gifts can find a new life in someone else's hands.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
