On Oct 17, 2016, at 1:07 PM, Lynette Cook <[log in to unmask]> wrote:If the question is about "What tax deduction may I take as the artist?", then Jim is correct that you can only take the cost of materials. If the question is, "The organization needs a cost estimate of the donation for their own purposes and what do I count?", then you can come up with a different answer. Nonprofits will need a $ value if you are donating art for an auction so they can list what the actual price is and select a starting $ value for bidding. Alternatively, the organization might want a $ value so they can total up over the cost of the year the donations of money and time (from all sources) and report this in an annual report or other elsewhere.On Oct 17, 2016, at 8:35 AM, James A. Perkins wrote:Hi OC,
Unfortunately, the U.S. tax laws for artists donating their own artwork are incredibly unfair. When an artist donates his/her own artwork to a charity, the artist is only allowed a tax deduction for the "cost basis" of the work, I.e., the cost of the materials that were used to create it. In this case, it would be the cost of the watercolor paper, paints, and pencils that you used. You are NOT allowed to take a deduction for the time you spent or the fair market value of the usage rights you are donating.
If that's not bad enough, it gets worse. As the original creator of the work, you own both the copyright and the original piece of art. In order to claim any kind of tax deduction, you are required to donate BOTH the original piece of artwork AND the entire copyright to the work to the charity. This is because the IRS views the original art and its copyright as two "interests" in the same work. If you donate only certain rights to the work and not the entire copyright nor the original artwork, you cannot claim ANY deduction, not even the cost basis.
There have been attempts to change this (look up the Artist-Museum Partnership Act) but the last I checked, none of these bills had passed Congress.
Sent from my iPad
On Oct 17, 2016, at 11:21 AM, OC Carlisle <[log in to unmask]> wrote:
I have completed a 22 x 14 illustration (watercolor and oil base color pencil and acrylic paint) of creative tools, such as paintbrushes, pencils, metalwork, wood turning, lacemaking, quilting, fiber spinning, weaving, etc, on 300 lb Fabriano Artistico hot press paper. Several artists & creatives furnished photographic images for reference. Additionally, I researched additional images to use.
The illustration will be used at 50% for print and digital media for an exhibition (17 Nov 16 - 21 Jan 17) for the Lyndon House Arts Center, a 501C3 organization. I have written a letter of agreement for their use, copyrighting the illustration. My signature is on the illustration with the ©. The Lyndon House will use this image on their social media outlets as well as 11 x 17 inch posters and 5.5 x 8.5 inch “hand bills” that will include informative text. I have requested that no text will be printed on the illustration. I have also requested that my name be included with the image on all publicity items, with the ©.
I have spent, on average 156 hours (research, layout, planning, drawing, painting) to complete.
I am donating the one time use of the image; requesting my permission if this organization wants to use the image again. The Lyndon House will also exhibit the framed original with a provenance text next to the painting.
What sort of value should I give to this artwork, as a donation of use. Is this acceptable procedure?
Please contact me off list if you suggest the dollar value; I understand that this is proper procedure.
Thank you very much indeed for your kind assistance!
OC CarlisleScientific Illustration, Photographic Fine ArtGuild of Natural Science Illustrators“Take Flight And Soar With Your Dreams”
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