De Minimis Rule

In the case where the donor advantage is 10% or less of the total donation (and where the advantage does not exceed $75), the advantage is ruled to be a token amount, and the entire donation is considered eligible.  Thus, a $100 donation in return for which the donor receives a book with a fair market value of $8 would result in a receipt with an eligible amount of the full $100.  If the value of the book, however, were $12, the 10% threshold would have been exceeded and the eligible amount would be only $88.  On the other end of the scale, the rule specifies that if the donor advantage is more than 80% of the total gift, it is to be considered a purchase, not a donation at all, and none of the donation is eligible for an official receipt.

BUT – If the donor advantage is a food item, the 10% exception does not apply at all.  Thus, with the $100 donation of our earlier example, if instead of an $8 book the donor were to receive a $6 hamburger, the eligible amount would be only $94.

The good news here is that, as long as you enter the amounts correctly, the Silent Partner will automatically calculate the eligible amount and produce the receipt accordingly.  So you don’t need to worry about understanding or remembering the de minimis rule; your job is simply to make sure that the amounts are entered correctly.

When there is an advantage to a donation, the CRA calls this “split receipting”.  They require the separate display of the following fields on a receipt:

• the total amount of the donation received
  
• the advantage amount (non-deductible portion)
  
• the eligible amount of the gift (tax deductible portion)
  

The Silent Partner will automatically handle this.