Disclaimer: This blog does not constitute legal advice.

For complete details, refer to the following documentation from the CRA:Issuing receipts for auctionsFundraising events - issuing receiptsDeemed fair market value ruleDetermining fair market value of non-cash giftsDonation of gift certificates or gift cardsIncome Tax Folio S7-F1-C1 §1.16When 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.

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Select your country and let CharityAuctions email compliant tax receipts for you.

How 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.

Donors cannot receive a deduction for personal services like golf with a pro golfer.

Auction Receipt Checklist

Download the Auction Receipt Checklist (Canada)

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)