Artworks that are donated by the person who created them.
Examples: Paintings, sculptures, jewellery, etc., produced by the artist. Artworks or cultural property donated by the artist are considered to be donated from the artist’s inventory. Inventory is normally valued at fair market value.
In this case, the charity issues the tax receipt for the fair market value. However, the artist can choose to report a lower value for his or her tax purposes, if the cost of creating the property is less than fair market value. In this case, the value must be:
- no less than the cost of the property to the donor;
- no less than the value of any advantage;
- and no more than fair market value.
This rule lets artists choose how much income they recognize for tax purposes on the donation of the artwork.
For further information see CRA's IT-504.