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Art, Supporting Non-Profits, and Tax Write-offs

Art, Supporting Non-Profits, and Tax Write-offs

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Art Donations….You May Be Surprised!

Last year, I donated art to over 20 not-for-profit organizations. I get many, many requests and some of them come out of nowhere! There are many local organizations that I continually donate to…but last year, I got requests from pretty far away! I received an email from one of the board members of Kidney Foundation of Northwest Ohio:

“Recently, several of our board members and volunteers have been raving about your unique art. Among them is Beth Rose whose realty/auctioneer business is based in both Toledo, OH and Naples, FL. It was after her most recent trip that she returned excited to share information about wired glass and your studio…..I was curious if you might consider donating a piece of your art for use in our live auction to help us raise money to support the provision of the aforementioned services to kidney patients. I’ve attached a case for support, a formal request letter, and a copy of the event save-the-date for your review.”

Northwest Ohio? Kidney patients? Well, OK! Sure! My husband rolled his eyes at me for that one..but hey…we artists donate art to help great causes because it gets our work noticed and maybe, just maybe, someone will remember that and actually come around to BUY something! It happens a lot..and I’m sure Ohio is no different! I DO have a web site with art for sale!

But, I digress.

I’m trying to talk more about TAXES and what we artists get to “write-off.” But, it was the letter from these folks that really got me going!

At the bottom of their “Thank you” letter was this statement:

“The fair market value of property/goods donated to 501(c)3 organization such as Kidney Foundation of Northwest Ohio, is deductible for federal purposes as a charitable contribution. The determination of the fair market value of property donated is the responsibility of the donor. No goods or services were received by the donor.”

Wow..I read that and thought…ohhh no…that’s not true! If that we’re true, I’d value the art piece I gave them at a million dollars and happily pass that info on to my accountant!

But, my accountant has been my accountant for over 20 years which is about as long as I’ve been a professional artist! She told me from day 1….if I donate art, I can only write off THE COST OF MATERIALS…and that’s about it!

But, the statement they sent me in their letter contradicted that! SOOO..I did some sleuthing.

This is a great article on the thought: http://www.freelancetaxation.com/can-i-deduct-my-art-when-i-contribute-it

And this one too.

http://robergtaxsolutions.com/2011/06/tax-tips-for-artists-why-you-might-not-want-to-donate-your-art/

It turns out…we’re both kinda correct! I can only deduct the cost of materials…and kids, it’s not much! But, if someone BOUGHT a piece of art, then they can deduct the value that they paid for it! Example:

Let’s say I donate a painting that would normally sell for $500. If you bought that painting and donated it to a charity, you’d get to write off the full $500 on your tax return as a charitable deduction. If I donate that painting instead, I can only write off the cost of the materials that I used to create that painting—depending upon what materials I’m using, that’s maybe $50 to $100!

So..the statement on the letter really only applies to NON ARTISTS!!!

I just really wanted to tell the world that we artists don’t really save much moolah when we donate. I consider it advertising and hope I get a sale from it. And if I don’t…well, I hope someone out there enjoys my art!!!!

Peace!!

MH