Auctions

General information and example

• Receipting for items donated for an auction:
• 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.

• Receipting for items bought at an auction:
• 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).

Tip

The charity can calculate the minimum bid that is required to meet the intention to make a gift threshold by multiplying the fair market value of the item by 125%.

Example

A bike is donated to a charity for an auction

• The fair market value of the bike at the time of donation is \$400
• The fair market value of the bike is posted at the auction
• The winning bid for the bike at the auction is \$550

Calculation of eligible amount

Eligible amount                                                 \$150

The amount of the advantage is \$400 and a receipt may be issued to the winning bidder for the eligible amount of \$150.

The fair market value of \$400 for the bike was established at the time it was donated, and a receipt may be issued to the donor for \$400.

If the fair market value of the bike was not made known to bidders in advance of the auction, a receipt could not be issued to the winning bidder.

The minimum bid required to meet the intention to give threshold is \$500 (fair market value x 125%).

If the total advantage had been greater than \$440 (80% of the \$550 winning bid), it would not have met the intention to make a gift threshold and a receipt could not have been issued to the winning bidder.

• Can receipts be issued for items donated for sale at an auction?

Yes. However, the fair market value of the item must be determined before a receipt can be issued. Keep in mind that gifts of services cannot be receipted. For more information, go to Gifts of services.

• Can a charity issue a receipt for a hockey jersey signed by an NHL player?
Yes. If the charity can determine the fair market value of the jersey when it is donated, it can issue a receipt. If the charity is not able to determine the fair market value, a receipt cannot be issued. See Determining fair market value of non-cash gifts.
• Can a charity issue a receipt to the donor for the appraised value of a donated item if the item is sold at the auction for less?

Yes. The charity may issue a receipt to the donor for the appraised value of the donated item even if the item is sold for less at the auction.

• If a business owner donates a gift certificate to a charity for the purchase of goods and services from his business, can the charity issue a receipt to the business (the issuer)?

No. When the issuer donates a gift certificate directly to a charity, there has not been a valid transfer of property. As a result, the issuer is not entitled to a receipt at the time the donation is made. The issuer may be eligible for a receipt if the charity redeems the certificate for property. For more information, see Guidance CG-007, Donation of gift certificates or gift cards.

• Does it make a difference for receipting purposes if the auction is a silent auction?

No. It does not make a difference.