Canadian Cultural Property
Fair Market Value
Information for Institutions
ADAC Appraisal Service
The ADAC offers established and professional valuations of artworks that are donated as Cultural Property of Canada. Years of experience as a liaison between institution, appraiser, and government have established the ADAC as an efficient and economical source of accurate, arm's length appraisals of fine art. The Association acts as a coordinator through the entire appraisal process. Our reputation for quality Cultural Property appraisals has made the Association the evaluating body of choice for many of Canada's institutions and collectors.
The information provided on this website is offered as a general guide to donations of Canadian Cultural property. There are three provisions through which artwork may be gifted and a formal tax receipt issued: Certified Cultural Property, Charitable Donation, and Gifts to Canada, a province or a territory. The ADAC does not appraise gifts or charitable donations, nor do we supply appraisals for insurance purposes. We can however, suggest one of our member galleries to assist with appraisals for the general public. Please contact the ADAC at firstname.lastname@example.org
For further information on donating works of art, please refer the Canada Revenue Agency's pamphlet Gifts and Income Tax.
For more information on the Canadian Cultural Property Export Review Board you can visit their website here.
Canadian Cultural Property
Gifts of Certified Cultural Property Through the "Cultural Property Export and Import Act" (CPEIA), the Government of Canada helps to protect the nation's heritage and ensure that our unique and diverse cultural life is preserved for all to study and enjoy. The Government provides incentives for donating art to designated institutions and public authorities in the form of significant tax reductions to the donor. The Canada Revenue Agency defines a gift as a "voluntary transfer of money or property for which the donor receives nothing of value in return." However, donors may be able to claim the Fair Market Value (FMV) of the gift as a non-refundable tax receipt as a result of the donation. (Please see section on Fair Market Value for further definitions)
Under the "Cultural Property Export and Import Act", the amount eligible for claiming a tax credit is 100% of the current Fair Market Value of the property on the date of donation. This tax credit can be offset against the total amount of the donor's net income. If the fair market value exceeds the donor's total net income for the year, the remaining tax credit can be carried forward and claimed during the following five years. Unlike charitable donations, with certified cultural property, the donor is exempt from any capital gains resulting from the gift.
In order to qualify for this tax credit, the artwork must be certified by the Canadian Cultural Property Export Review Board (CCPERB) as being culturally significant. The Review Board may rule that an object is significant because of its close ties with Canadian history or national life, its aesthetic qualities, its value in the study of the arts and sciences, or its degree of national importance. Cultural Property does not have to be Canadian in origin.
How to Donate Artwork as Cultural Property
The artwork must be donated to a designated institution or public authority (which includes a select number of public galleries, museums, universities and public authorities across Canada). The donor must have a signed deed of gift provided by the institution prior to December 31 of the taxation year in which the donation is made. The designated public institution or public authority receiving the gift, must apply with the donor, or on behalf of the donor, to the Review Board to have the gift certified as Cultural Property. This application must contain documentation of the work's cultural significance, and a current Fair Market Value appraisal must also be provided.
Gifts by Art Dealers
If the donor buys or sells artwork as a business, the donation of a work of art will be considered part of the donor's inventory. Therefore, according to Canada Customs and Revenue Agency, the proceeds will be considered business income based on the FMV of the gift. If the gift is from a private collection, the usual donation rules apply.
Fair Market Value
What is Fair Market Value?
According to Canada Revenue Agency, the generally accepted meaning of Fair Market Value is the "highest price, expressed in terms of money, that the property would bring in an open and unrestricted market between a willing buyer and a willing seller who are knowledgeable, informed, and prudent, and who are acting independently of each other."
The Canadian Cultural Property Export Review Board (CCPERB) has stringent requirements for appraisals of artwork certified as cultural property. It should be noted that the appraised value reflects, but does not establish, the Fair Market Value of the work at the time of donation.
Who can Request a Fair Market Appraisal from ADAC?
The appraisals provided by ADAC are "arm's length" evaluations meaning that ADAC is not influenced by the expectations of the donor in assigning Fair Market Value and limits its communications to the public institution receiving the work for donation. In this process, the appraisal request can only be initiated through the institution.
Information for Institutions
Cultural institutions need to provide the following ADAC forms in order to proceed with the appraisal process:
1) A completed "Appraisal Documentation" form detailing the information on the gifted work. The inclusion of dimensions in both centimeters and inches, provenance, as well as the names of any known dealers.
2) Signed "Fee Schedule/Letter of Agreement - Terms and Conditions" form. If required, ADAC can provide an estimate on a proposed valuation.
3) A colour image of the work. Images should be submitted electronically preferably in JPEG format (800 x 600 pixels or 11 x 8 inches, 72 dpi).
4) Condition Reports
5) the statement of Outstanding Significance and National Importance (OS/NI). This will assist appraisers greatly in contextualizing the work and appraising its fair market value. CCPERB's OS/NI Justification guidelines can be found here.
6) Any additional information that would assist in the determination of current fair market value, such as bibliographic references, biography or Curriculum Vitae of the artist.
Download PDF versions of the ADAC Request forms:
Click here for an ADAC
Fee Schedule/Terms and Conditions Form
Click here for an ADAC Appraisal Documentation Form
Please note that ADAC encourages institutions to submit an application via email whenever possible; by doing so you will expedite the processing of your application.
For further information please contact email@example.com or by calling (416) 934-1583.
2014 Cultural Property Appraisal Deadlines
ADAC accepts appraisal submissions from institutions at any time of the year. Please note that we ask institutions to submit appraisal applications with all required material to the ADAC at least 6 weeks ahead of CCPERB deadline they would like to meet (see dates below). If you would like to submit an application after an ADAC deadline, please contact the office to discuss scheduling.
ADAC Suggested Deadline: please contact the office
CCPERB Deadline: Wednesday, January 7, 2015
ADAC Suggested Deadline:Friday, March 6, 2015
CCPERB Deadline: Friday, April 17, 2015
ADAC Suggested Deadline:Friday, May 29, 2015
CCPERB Deadline: Friday, July 10, 2015
ADAC Suggested Deadline:Friday, August 28, 2015
CCPERB Deadline: Friday, October 9, 2015