We are hosting a fundraiser coming up with a silent auction component. We recently had a painting donated to us and the individual is asking for a tax receipt for $1,200. This is a new experience for us as this seems to be his personal evaluation of how much his painting is worth. Does anyone have experience with this and do you just go with their assessment or how do you find out the FMV of the painting/item?
Thanks in advance!
Heather
Hi Heather,
We usually require them to provide an outside evaluation. If they are the artist that can be as simple as a letter from an art gallery that sells their works. It usually says something like, we sell their works, this piece X of size and material would sell for $$$ in the gallery. If the donor can provide proof of value from somewhere else, like an insurance evaluation or they recently purchased it we would go with that. You could pay someone to determine the value, but you're unlikely to recover that in an auction. We are Canadian, so here's the CRA guidelines we use: https://www.canada.ca/en/revenue-agency/services/charities-giving/charities/operating-a-registered-charity/issuing-receipts/determining-fair-market-value-gifts-kind-non-cash-gifts.html
Ann