If a collector buys a work of art, and donates it to a museum, they can
deduct the fair market value at the time of the donation, not just what they
paid originally. This can work out to a tidy profit for the donator. But if
the artist who made it donates it, all he/she can deduct is the original
price of materials. Is this fair?

When an artist dies, by the way, the value of their art in the estate is
assessed at fair market value - the big problem alleged in fixing value
seems to disappear. Often, the heirs are forced to sell it off at fire-sale
prices to pay the tax owed, and can't afford to donate any to non-profits.
Is that fair, or in the public interest?

Bob writes: "If your work is so good that museums want it, you can't be
hurting too badly." I wonder what planet he comes from. Here on earth, being
able to produce art that's good -even good enough for museums - does not
guarantee any monetary income at all. Yes, you can indeed be hurting badly.
While artists, I agree, should not be accorded specially favorable treatment
in the tax code, neither should they be singled out for specially
unfavorable treatment. Any other manufacturer who donates their products to
a recognized non-profit can deduct the fair market value, whether it is
computers for schools or food for the hungry, and this is generally accepted
as good for everybody concerned. Many industries get more favorable
treatment than that, like the oil companies (and they're not exactly
hurting), which get a "depletion allowance" for the petroleum that lies in
the ground (appreciating greatly as it does so). But artists, uniquely, are
arbitrarily limited to deducting the costs of their materials only; not the
cost of their overhead, equipment, foundry services, education, or any of
the other costs that went into producing their art. Is that fair, or even
consistent?

Nobody's talking about being "owed a living" here. A tax donation is only
useful if one has a tax liability in the first place; it does you no good if
you're too poor to have to file a return. And if the museum didn't think a
prospective donation was worth having, they are under no obligation to
accept it. The tax code is commonly used to encourage things the government
thinks are good (like owning a home, or digging oil wells), and to
discourage things it considers harmful (like smoking cigarettes, or buying
sugar from other countries). In this case, it would seem that art was in the
latter category, as far as the bureaucrats of Washington are concerned. Of
course, it's really just a matter of political clout - the mortgage, oil and
sugar industries have it, artists do not, and we are punished accordingly.
If we got together and lobbied for equitable treatment we might get it; the
status quo is the result of our not having a collective voice that reaches
the ears of our rulers.

Andrew Werby

www.computersculpture.com






"Bob Masta" wrote in message
...
On Tue, 4 Mar 2008 10:20:42 -0500, "D Kat"
wrote:


"Bob Masta" wrote in message
...
http://www.capwiz.com/artsusa/issues...521951&type=CO

Donna


As I understand it, the old "materials value only" rule applies evenly
to *everyone*, not just artists. If you are a truck driver and agree
to drive the artist's pots to the museum, you don't get to deduct
for your time as if it were a regular paid-for delivery. Nor does a
carpenter who agrees to crate the pieces, etc.

And it doesn't apply just to museum donations, it applies to all
donations. It probably has to be this way to prevent abuse.
Consider the old scam whereby people donate their old books or junk
and claim a hefty market value. If they were allowed to claim a
value for their time, it would be even harder to verify.

And art is in a class by itself as far as being hard to assign
market values. Unless the piece has already been sold, it's not at
all clear what its value is. Certainly *not* the price the artist has
been asking for it as it languished in the last umpteen art fairs,
nor even what the posh uptown gallery is asking.

So, if you are an artist who is affected by this, the solution is
simple: Put your money where your mouth is and *sell* the piece, and
donate the money to the museum!

For the rest of us, the thrill of having a piece in a museum, not to
mention the boost in professional stature and the increase in the
market value of other for-sale pieces, would be more than enough
compensation.

Best regards,


Bob Masta

The problem is Bob that few artist can afford to sell the piece and donate
the money earned. Even when they donate the piece they are not getting
that
price in return in their taxes. We are talking about a deduction not a
credit - so if you are in the 20% tax bracket then you get 20% of the
estimated value of the item taken off of your salary that is taxed - then
add in the lovely AMT which limits even that. As far as scamming goes -
they are now pretty ridged about what they allow - you have to document
your
donations and something such as this would have to be valued by the museum
not by the artist.

When I volunteer my time at the crafts studio, I would never dream of
trying
to take a tax deduction for that time. That is something very different
from a piece of art that will not only hold its value but increase in
value
over time. The museum if it needed the money could sell the work of art.
It cannot sell the crate it was shipped in or the time I took building
that
crate.

Apples and Oranges. Donna


It's not at all clear why artists should receive special treatment.
Consider the carpenter who builds a house for Habitat for Humanity.
All the same arguments about holding value apply here as well, and
the value is easily verified. Yet the carpenter can't claim that
value, only materials.

Having a piece in a museum is a benefit for the artist, much more
so than a Habitat for Humanity house is for the carpenter, since
the museum exhibit will be a continuing advertisement, with
prominent attribution. Any artist who feels they need added financial

incentive is being a tad greedy, IMHO.

I also wonder about the premise that few artists can afford to sell
the piece and donate the money. If your work is so good that
museums want it, you can't be hurting too badly.

Forgive me if it seems I have my hackles up over this, but I do
not think artists should be placed on any sort of pedestal.
If they can't succeed at doing the thing they love as a business,
they should find another line of work and do art as a hobby,
just like everyone else. Nobody owes them a living just because
they hang out a shingle and proclaim themselves as artists.
If a carpenter can't make houses that people want to buy,
he can change careers or starve... but he sure can't expect
charity just because he is no good at his proclaimed profession.


Best regards,


Bob Masta

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