- Receipting for items donated for an auction:
- 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).
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%.
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
Winning bid (the gift) $550
Less advantage: Bike $400
Total advantage $400
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.
Report a problem or mistake on this page
- Date modified: