Gifts in Kind: Fair Market Value, Appraisals, Receipts

Someone offers your charity a piece of equipment, a painting, or a case of goods for the auction, and asks what the receipt will say. The honest answer involves more steps than most donors expect, and one widely repeated rule about appraisals is not a rule at all. A charity issuing a receipt for property has to establish a value, check whether a deeming rule overrides it, and put specific things on the receipt that a cash receipt never carries. This guide covers all three from the charity's side.

What is a gift in kind?

A gift of property rather than cash, and the definition of property is what decides most edge cases. Not everything offered to a charity is a gift in kind.

Capital property, equipment, inventory, artwork, collectibles and real property can all be gifts in kind. So can shares, though donated securities have an operational sequence of their own and are covered separately.

What is not a gift in kind is a service. A contribution of skill or labour is not a transfer of property, so a charity cannot issue an official donation receipt for donated services, however valuable the work. That subject has its own article.

The use of property without transfer of ownership is also not a gift. Lending your charity a venue for an evening transfers no property, so there is nothing to receipt. Start every non-cash offer with that question, because deciding whether property was actually transferred prevents most receipting problems before valuation begins.

Who can determine the fair market value?

It depends on the value, and CRA's position is a recommendation rather than a threshold in law. This is the point published guidance most often gets wrong.

CRA's position has three parts. Where the fair market value is less than $1,000, a member of your charity or another individual with sufficient knowledge may determine it, and that person should be competent and qualified for the particular property. Where the value is expected to exceed $1,000, CRA strongly recommends a professional appraisal by a third party not associated with either the donor or the charity. And where an appraisal is done, the appraiser's name and address must appear on the receipt.

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Notice what is not there. No legal requirement attaches an appraisal to a value threshold. Sources describing the $1,000 figure as a hard rule are wrong, and charities acting on them decline gifts they could accept.

What does not change with value is the onus: your charity is responsible for justifying the figure on the receipt, whoever produced it. Document who determined the value, on what basis, and when. Comparable sale prices, a supplier's price list or a dealer's written opinion are all defensible; a donor's assertion on its own is not.

When does the deemed fair market value rule apply?

When the property was acquired recently or through a tax shelter, in which case the receipt is for the lesser of fair market value and the donor's cost. Check this before valuing anything.

The rule applies where the gift was donated after 5 December 2003 and one of three further conditions holds: the property was initially acquired by the donor as part of a tax shelter arrangement; or it was acquired less than three years before the gift; or it was acquired less than ten years before the gift with one of the main purposes being to gift it to a qualified donee.

Where it applies, the receipt is issued for the lesser of the property's fair market value and its cost to the donor, or its adjusted cost base for capital property, immediately before the gift is made.

CRA's own example makes the effect plain. A donor buys a work of art for $300, has it appraised at $1,000 six months later, and donates it. Because the gift is within three years of purchase, the receipt is for $300, not $1,000.

Two kinds of carve-out exist. The three-year and ten-year conditions do not bite where the gift was made as a consequence of the donor's death. Separately, the rule does not apply at all to gifts of inventory, real property or an immovable situated in Canada, an object certified by the Canadian Cultural Property Export Review Board, securities such as shares, debt obligations or rights listed on a designated stock exchange along with mutual fund shares and units, or ecologically sensitive land, including a covenant, an easement or, in Quebec, a real servitude.

Two limits on those exceptions are worth knowing. The cultural property exception does not extend to an object acquired as part of a gifting arrangement that is a tax shelter, and the ecologically sensitive land exception does not apply where the gift is made to a private foundation.

That list is not the whole of it. Further exceptions cover certain shares received on a transfer to a corporation the donor controls, property transferred under the tax-deferred rollover provisions, and property the donor acquired on certain rollovers. Those turn on the donor's transaction history rather than on the property, so where a donor mentions a corporate transfer or a rollover, get tax advice before setting the receipt amount.

Ask when and how every non-cash donor acquired the property, and record the answer. If the donor fails to provide information relevant to the deemed FMV rules, the eligible amount is deemed nil.

What if you cannot determine the value?

Then do not issue a receipt. CRA's position is that where the fair market value of a gift cannot be determined, a charity should not issue one.

This comes up with unusual property: an artwork by an unknown artist, or specialised equipment with no market. It is not a failure of effort; some things genuinely have no ascertainable market value.

Decline the receipt rather than estimating; a receipt for an unsupported amount exposes the charity and the donor. You can still accept the gift: record it according to what it is, thank the donor, and explain why no receipt is being issued.

Settle these questions before accepting significant property, which is what a gift acceptance policy is for. A policy saying what your charity will accept, and who values what, turns an awkward conversation into a stated position. 

What must a non-cash receipt show?

Everything a cash receipt shows, plus four things specific to property. A cash template used for a gift in kind is incomplete.

Beyond the standard elements, which include the eligible amount of the gift on every receipt, a receipt for a gift of property other than cash must show the date the gift was received, a brief description of the property, the name and address of the appraiser where an appraisal was done, and the fair market value of the property at the time the gift was made. Where the donor received an advantage, a description and the amount of that advantage appear as well.

The description matters more than charities expect. "Artwork" is not a description; "oil on canvas, 60 by 80 cm, signed, titled Harbour Morning" is. It is what connects the receipt to the valuation evidence.

Certified cultural property and ecological gifts carry certification processes and tax consequences of their own. Two facts are worth holding. For donations made on or after 19 March 2019, national importance is no longer a factor in certifying cultural property for tax purposes; the object must meet the outstanding significance criteria, and national importance still applies to export decisions. And where a recipient disposes of ecological property or changes its use without authorisation from the federal Minister of the Environment, a tax equal to 50% of the property's fair market value on that day applies. Get advice before accepting either.

Our receipt examples page carries CRA's own samples for non-cash gifts with and without an advantage.

How do the receipt and the accounting entry differ?

They can carry different numbers, and where they do the difference has to be visible. Do not assume one drives the other.

Accounting standards for not-for-profit organisations have their own recognition and measurement rules, under which contributions are generally measured at fair value where that can be reasonably estimated. The receipted eligible amount can differ, because the deemed fair market value rule or an advantage reduced it.

Where the two differ, record the contribution at its accounting value and keep a short reconciliation to the eligible amount on the receipt. That is what lets you produce the annual return from the ledger without either figure being wrong, and a consistent charity bookkeeping routine keeps the reconciliation current through the year rather than leaving it for year-end. 

Three things should sit together for every receipted non-cash gift: how the value was determined, who determined it, and the receipt number. Give these gifts their own revenue account so the total is a report rather than an investigation; our guide to recording charitable donations covers the mechanics.

Where non-cash gifts are becoming a regular feature, the valuation process and the account structure are worth setting up deliberately. That is the kind of thing ongoing bookkeeping support should establish rather than retrofit.

Frequently Asked Questions

Do we need an appraisal for every gift over $1,000?

No legal requirement attaches an appraisal to a value threshold. CRA strongly recommends an independent third-party appraisal where fair market value is expected to exceed $1,000, and below that a competent and qualified person, including someone at your charity, may determine the value. The onus to justify the figure sits with the charity either way.

A donor tells us their item is worth $5,000. Can we receipt that?

Not on their word alone. Your charity is responsible for the value on the receipt, so it needs evidence you can produce later. Where the property was acquired recently, check the deemed fair market value rule as well, because it may cap the receipt at the donor's cost.

Can we receipt donated professional services?

No. Services are not property, so there is no gift in kind to receipt. Arrangements where a supplier is paid and then donates the payment back are treated differently, and that subject is covered separately.

What if the item is worth more now than when the donor bought it?

That is precisely when the deemed fair market value rule matters. Where the donor acquired the property less than three years before the gift, the receipt is for the lesser of fair market value and the donor's cost, so a gain since purchase does not increase the receipt, unless one of the statutory exceptions applies to that property or to how the donor acquired it.

Does the appraiser's name really have to go on the receipt?

Yes, where an appraisal was done. The name and address of the appraiser are required receipt content for a gift of property that was appraised.

Do we record the gift at the receipt amount?

Not necessarily. The accounting value follows accounting standards, and the receipted eligible amount follows the receipting rules, so the two can differ. Record both and keep a reconciliation between them.

This article covers the charity's side of receipting gifts in kind as at September 2026. It excludes donated securities, donated services, fundraising event receipting and the donor's tax position, each of which is covered separately or belongs with the donor's own advisor. Certified cultural property and ecological gifts carry certification requirements beyond this summary. Take advice before receipting a significant or unusual gift of property.