D7. When determining the fair market value of an item should we include the GST/ HST?

D7. When determining the fair market value of an item should a registered charity include the GST/HST?

No.

The fair market value of an item should not include taxes paid on purchasing the item. Taxes are a cost incurred by the purchaser and are payable to the Crown. The seller merely acts as an agent of the Crown in collecting the taxes

For example, a donor purchases a book from a dealer, pays the dealer the GST/HST on the transaction, then gifts the item to a registered charity. The amount entered on the official donation receipt should be the fair market value of the book before taxes.