BCSS Tax Receipting Guidelines
Breast Cancer Support Services
Tax Receipt Guidelines for Gifts in Kind
The Board of Directors, staff and volunteers thank you for supporting Breast Cancer Support Services. Your generosity adds to the enjoyment and the overall success of our events.
Donors of items to be sold at events may be entitled to official donation receipts if the gifts comply with Canada Revenue Agency’s (CRA) regulations and if fair-market-value can be determined. “At law, a gift is a voluntary transfer of property without consideration”.
For items donated with a value of $1,000 or less, Breast Cancer Support Services will determine the fair-market-value of the gift. For items deemed to have a value over $1,000, a third party will appraise the fair-market-value. The fair-market-value of an item does not include paid taxes on purchasing the item.
When a business donates a gift from its inventory it is generally more tax advantageous for the cost to be written off as a promotional expense.
Gifts of services such as hairdressing or dinners are not eligible for a tax receipt as the business is able to write off the cost of the service.
Registered Charities cannot issue official donation receipts for gift certificates they receive directly from the issuer (ie. restaurant or spa). If an individual purchases gift certificates, then the donor must provide proof of purchase when requesting a tax receipt.
Contributions of services may not be acknowledged by issue of an official tax receipt. A gift must involve property. Contributions of services (that is time, skills, effort) are not property and do not qualify. There is nothing to prohibit a charity from paying for services and later accepting the return of all or a portion of the payment as a gift - provided it is returned voluntarily. The donor must, in such an arrangement, account for the taxable income that would be realized, either as remuneration (in which case the charity may be obliged to issue an information slip) or as business income.
The purchase of goods or services from a charity may not be acknowledged by issue of an official tax receipt for all or part of a payment for such a purchase. This rule applies even when the buyer pays an amount in excess of fair-market-value to enhance the profit of the charity. However, the rule does not apply if the purchase can be viewed as a donation because the goods or services purchased have only nominal value in relationship to the amount paid.
Gifts of Art and the like (where the fair-market-value assessment is not readily available) must be appraised by an independent third party who is recognized as being an expert in the field in question or the tax receipt may be issued for the amount the item was purchased for at the event.
Hospitality gifts such as dinners hosted at people’s homes, are considered by CRA to have no comparable market value and therefore a receipt can only be issued for the actual cost of the dinner components where supported by appropriate invoices, cash register receipts or their equivalents.
It is the CRA’s opinion that with regard to certain personal items such as, but not limited to, the jersey of a hockey player, the right to play golf with a particular person or the right to dine with a particular person, the value of the item will be the bid such that there will not be an eligible amount.
“Priceless” gifts - such as a VIP visitor on a television/movie set, or a guest on a radio show - do not qualify for a charitable tax receipt, as such gifts have no fair-market-value.
The above points deal with several common situations, and are not intended to cover all circumstances. If your situation is outside these, please call BCSS at 905.634.2333 to discuss.
