Donating Artwork can lead to a Tax Deduction

Art Gallery Exhibit

Tax Benefit to Donating Art

What a great summer its been! Full of art exhibits and discovering new artists. Perhaps you added to your collection and now ready to donate your other artwork. Consider the tax benefit of donating your art.

The first thing to consider is which artwork are you ready to donate? This may require evaluating different emotional and practical factors so don’t rush yourself. Once you have identified a piece or pieces of artwork, you then must select an organization to donate to.

When selecting an organization make sure it is appropriate for the artwork being donated. Secondly, in order to received a tax benefit for donating the art, make sure it qualifies as a charitable organization by the IRS.

Fair Market Value and Deductions

The Tax Reform Act of 1986 permits income tax deductions for non-cash donation of 100% of the fair market value when donations were made to qualifying charitable organizations.

Deductions for the contributions of artwork are normally supported by a written appraisal from a qualified and reputable source, unless the deduction is $5,000 or less, in which case the qualified appraisal is optional.

However, if a deduction of $20,000 or more is claimed a complete copy of the signed appraisal must be attached to the tax return. Taxpayer must also be ready to provide the IRS with high resolution color digital images of the artwork being donated upon request. In addition, the IRS Form 8283 is required for artwork donations with Section B, Part III completed by a qualified appraiser.

Keep in mind that a qualified fine art appraiser is different than a authenticator. Read how more about this difference by reviewing our earlier article.

If you have any questions, please contact us. We would be happy to help.

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