Dinners and Auctions
If the value of the auction item is ascertainable, and the value is made known to all bidders ahead of time, and if someone bids more than 1.25 times the value, that portion could be considered a gift, eligible for a tax receipt.
If an event is held at a restaurant, the price the restaurant would charge for their regular customers would be the “advantage”.
- Cost of the ticket to the dinner is $250, with the Fair Market Value of the meal being $100
- The “advantage” received by the attendee is determined to be $100, that is, $250 less $100 for the meal.
- The donation receipt will be $100.
- Dinner with a celebrity, or a round of golf with a pro, will not result in a tax receipt, no matter how much is paid, due to the inability to assess the value of the “advantage”
NOTE: For fund raising events such as a dinner, auction and golf tournament, a tax receipt may be issued for the entry fee less the ‘benefit’ the participant has received. However, the ‘benefit’ amount cannot exceed 80% of the entry fee. In addition, please note that if the prizes received by the donor does not exceed the lesser of 10% of the entry fee or $75, then the prizes received by the donor will not reduce the tax receipt gift amount.