III. How to Value a Gift?

Tangible gifts are generally valued at the item’s fair market value, even if the item is not typically for sale. Fair market value is the item’s retail price, not the wholesale price, or the reasonable estimate of an item’s cost if it were available for sale. You may use the lowest price available to the general public to value a gift.

Gifts that are offered at the same time from the same person must be aggregated to determine value.

Example. You attended an awards gala and at the end of the event, the event organizer handed out a gift bag. Inside the gift bag were 5 items, each worth $10. The gift’s total value is $50.

The Committee has different formulas to value tickets to events and honorary memberships.

• The face value of a ticket to a sporting event or show is the ticket’s fair market value.[7]
  • If the ticket does not have a price printed on it, the value is the highest priced ticket for that event, in that venue, on the primary market.
• The value of tickets to charity or political fundraisers is the value of the meal.[8] The cost to the purchaser is not the ticket’s value.
• The value of honorary memberships is the total of the organization’s normal initiation fee, periodic dues, and usage charges. The value does not change if you do not use the membership.

The value of an intangible gift, such as a discount or a below-market interest rate, is the difference between the market rate and what you are asked to pay.

Example. Your first cousin offers to help you pay for living expenses. Your cousin is willing to loan you the money you need at 0% interest if you pay your cousin back in a year. The prevailing interest rate is 3%. The gift to you would be 3% interest for that year. You may accept the loan from your first cousin as a gift from a relative.

Attendance at a meeting or informational briefing generally does not have monetary value. But during that meeting or briefing, you may be offered a meal or packet of informational materials that does have monetary value. Please see Exceptions to the Gift Rule for Permissible Gifts to determine whether you may accept those additional gifts.