Artists donating their own work

[jasdlm]

Does anyone know what happened to the bill that passed the house, I think, in 2006 regarding artists being able to donate their work and deduct the fair market value rather than their material cost?

I've tried googling but haven't found anything.

Thanks.

[jasdlm]

Bump

[indyscott]

Darn, it seems I recall hearing something about that in the news recently, but, I can't recall what it was. There would have to be an independent appraisal done to establish FMV. Maybe an art appraiser would know something about it.

[LindaB]

In pub. 561, Determining the Value of Donated Property, it says you need an appraisal for art work valued at over $5,000. In pub. 536, Charitable Contributions, for contributions of property it says it is generally the FMV, and art work is not one of the exceptions. These are from pubs. for 2007 returns, maybe prior years said something different?

(Taxidermy property is one of the exceptions for using FMV, the deduction "is limited to your basis in the property or its fair market value, whichever is less. .... basis does not include direct or indirect costs for hunting or killing an animal...")

[Julie]

There is an important difference between artwork donated by the artist and artwork donated by a subsequent owner.

According to my Quickfinder (p5-14), property that would generate ordinary income when sold can only get a deduction of basis. Property that would generate capital gain when sold would permit a deduction of FMV. This is discussed on p 11 of pub 526.

So, you buy a painting in a gallery for $1200. In a few years it may be worth $5000, and then you can donate it and claim the $5000 deduction (with appraisal, of course).

But in the case of a professional artist donating his own work, it is inventory in his business, and because he was permitted to expense his paint and canvas, probably has no basis at all.

Beyond that, artwork by living artists has a wildly variable value. Artists are notoriously bad salesmen, and would much rather make art than sell it. So getting rid of excess inventory is a common problem. (Having been married to an artist for nearly 20 years, I know this firsthand.) Example: "Color Study A" and "Color Study B" are similar paintings hanging in a gallery, both priced at $1200. Color Study A sells at that price, and the artist pockets his $720 (after the gallery commission). Color Study B does not sell at all, and is subesquently donated to a local charity. In 50 years, after the artist is dead, it may become very valuable, but at the time of the donation, it is essentially worthless, given away because it could not be sold. Even though it's similar to a painting that sold for $1200. For the purposes of the public television auction (the usual recipient of such donations in my city), the value will be stated at $1200. But to the artist, fond as he may be of the piece, it's old inventory which needs to be cleared out so he can get back to his studio and make some more art. And the basis has already been written off.

As for the original question, I would like to see the bill in question. I hadn't heard about it and would like to know more.

In pub. 561, Determining the Value of Donated Property, it says you need an appraisal for art work valued at over $5,000. In pub. 536, Charitable Contributions, for contributions of property it says it is generally the FMV, and art work is not one of the exceptions. These are from pubs. for 2007 returns, maybe prior years said something different?

(Taxidermy property is one of the exceptions for using FMV, the deduction "is limited to your basis in the property or its fair market value, whichever is less. .... basis does not include direct or indirect costs for hunting or killing an animal...")

[Booger]

What do you call a man with no arms and legs hanging on the wall?..........ART.

Yuck Yuck

What do you call a man with no arms and legs in the middle of the ocean?.........BOB.

What do you call a man with no arms and legs lying next to your door?..........MATT.

Booger

[Blackenend]

What do you call a man with no arms and legs hanging on the wall?..........ART.

Yuck Yuck

What do you call a man with no arms and legs in the middle of the ocean?.........BOB.

What do you call a man with no arms and legs lying next to your door?..........MATT.

Booger

lol your just full of jokes aren't you?

[Booger]

My favorite type of art is the black-velvet paintings of naked women

with big HOOTERS.

Booger (Male Chauvinist Pig)

[michaelmars]

i didn't know you like trumpet players