D10. How does our charity determine the fair market value of an advantage?

D10. How does our charity determine the fair market value of an advantage?


Short answer

Determining the fair market value of an advantage is similar to determining the fair market value of a gift in kind. While only donations of property can be receipted as gifts in kind, the fair market value of any type of advantage (for example, services, accommodation, or meals) must be taken into consideration when determining the eligible amount of a gift for receipting purposes.

The determination of the fair market value of the advantage must be done regardless of the item’s actual cost to the registered charity. That is, even if the charity did not pay for the item it offers as an advantage, its fair market value must be calculated.

Example
One hundred (100) books are donated to the charity by a retailer. These books are worth $25 each on the open market. So the fair market value of the advantage is $25. If the Charity decides to give these books to their donors, this advantage of $25 has to be taken into consideration in determining the eligible amount on the official donation receipt.

 

Note

If the fair market value of the advantage cannot be determined, receipts cannot be issued.