Non-cash gifts, fair market value and appraisals
Updated
This page summarizes what the CRA says about receipting a gift that is not cash. The main source is Determining fair market value of non-cash gifts (opens in a new tab). It is not tax or legal advice. If your case is unclear, check the CRA pages or ask a professional.
To use the form, see Gift-in-kind receipts.
What fair market value means
The CRA describes fair market value (FMV) as normally the highest price, in dollars, that the property would bring in an open and unrestricted market, between a willing buyer and a willing seller who are both knowledgeable, informed and prudent, and who act independently of each other.
A receipt for a non-cash gift must reflect the FMV of the gift. The CRA says the onus is on the charity to make sure the FMV on the receipt is accurate. If the FMV at the time of the donation cannot be determined, an official donation receipt cannot be issued.
Who works out the value
- Under $1,000. The CRA says that, generally, a member of the charity or another person with sufficient knowledge of the property may determine its value. That person should be competent and qualified to evaluate that kind of property.
- Expected to be more than $1,000. The CRA strongly recommends a professional appraisal by a third party, meaning someone not associated with either the donor or the charity.
- If the property is appraised. The CRA says the appraiser's name and address must be on the receipt. FreeCharityReceipts requires them when you choose Professional Appraisal. See What a CRA official donation receipt must show.
The deemed fair market value rule
Under certain conditions, the CRA says a receipt for a non-cash gift must be for the lesser of the gift's FMV and its cost to the donor (or, for capital property, its adjusted cost base) just before the gift. The conditions include property acquired less than three years before the gift, property acquired less than ten years before the gift where one of the main purposes was to give it to a qualified donee (for example, a registered charity), and property first acquired as part of a tax shelter arrangement. The CRA page lists them all, and lists the gifts that are exempt: Deemed fair market value rule (opens in a new tab).
The CRA notes that if the donor does not tell the charity that the gift is subject to the rule, the value of the donor's gift could be reduced to nil.
The gift-in-kind form has no separate field for a deemed value. If the rule applies, work out the amount first and enter that as the Gift Amount ($). Ask the CRA or a professional if you are unsure.
What cannot be receipted
- Services. The CRA says only gifts of property can be receipted as non-cash gifts. Its checklist says a charity cannot issue receipts for contributions of services provided to the charity, because services do not qualify as gifts (Issuing complete and accurate donation receipts (opens in a new tab)). Services given as an advantage to a donor are different: they count when working out the eligible amount. See Split receipting.
- A gift whose value cannot be determined. The CRA says a receipt cannot be issued if the FMV cannot be determined.
One receipt per non-cash gift
The CRA says a separate receipt must be issued for each non-cash donation (When should a charity issue a receipt (opens in a new tab)).
Cultural property and ecological gifts
The CRA says special incentives, rules and procedures apply to gifts of cultural property and to ecological gifts. This page does not cover them. See the CRA's Determining fair market value (opens in a new tab) page for the publications it points to.
What the form does
| Item | What FreeCharityReceipts does |
|---|---|
| Fair market value | Fair Market Value ($) fills in with the Gift Amount ($) and is locked. |
| How the value was determined | You choose Invoice/Receipt, Professional Appraisal, Published Listing or Other (requires documentation). The choice prints as Valuation. |
| Supporting documents | Not collected or kept. Keep the invoice, appraisal or listing yourself. |
| Appraiser's name and address | Appraiser's name and address is required when you choose Professional Appraisal (up to 150 characters). It prints as Appraiser. |
| Deemed fair market value | No field. |
| Advantage on a non-cash gift | No field. The gift-in-kind form can't subtract an advantage. |
| Property or service | Not checked. You decide whether the gift is property. |
Related articles
Still stuck? Email us