Tax Deduction for Charitable Gifts - Art

Time for our annual reminder that giving art to qualifying non-profit organizations can qualify you for a tax deduction for donations to charity. The general outline of the requirements are detailed in our post Tax Deduction the Charitable Giving of Art.

Please check with your tax advisor for any updates to the regulations surrounding the deduction.

Happy Holidays and get ready for the next season to roll around - Tax Season!

Tax Deduction for Charitable Giving of Art

It's that horrible season of the year again! No, I'm not referring to Christmas; it's "tax season" that I'm referring to. So time for our once-a-year reminder about the option to get a tax deduction for giving art to approved charities. I guess with the way the markets are this year, many people will have more capital losses than gains to worry about, but if you're in the fortunate position of having income against which you wish to make a deduction for donations, then don't forget the one available for gifting art to charities. We wrote this article on saving taxes by donating art some years ago now, so caution you to bring yourselves up to date on any changes that may have happened to the rules, Congress being the perfect example after all of the truth in the saying that "Idle hands are the devil's workshop".

Happy Holidays and Happy Tax Season!

Donate Art, Save Taxes

Donate Art to Charity and Potentially Deduct More Than Your Cost Basis

It might be several weeks yet till the 2007 tax year filing deadline in mid-April, but if you intend to donate art to charity and claim a deduction for charitable giving, you only have a few days left to act. Your art donation must be made by the end of the calendar year, so act now!

This is a charitable donation that can help not only the beneficiary charity, but yourself too. The actual cost basis of the artwork has no relationship to your deduction; you can deduct the fair market value of the artwork that you donate to and IRS-approved charity.

So if you bought the artwork some time ago and it has appreciated in value, you get to deduct the appreciated value from your taxable income, not what you paid for it (your cost basis).

Or if you can acquire art at a cost that is less than the appraised fair market value (FMV), then you can deduct more than you are out of pocket.

One significant catch that you need to be aware of, however, is that you must have owned the artwork for a minimum of 12 months to qualify for the deduction.

Continue reading for more detail concerning the charitable donation of art ...