On Sat, 8 Mar 2008 12:15:31 -0800, "Andrew Werby"
wrote:


"Bob Masta" wrote in message
...

As I mentioned in my earlier posts, the artists are not now being
singled out for unfair treatment... it's the same rule that is applied
equally to all individuals, be they artists, carpenters, or truck
drivers. If, in fact, corporations don't have to abide by this same
rule is another question. They seem to be able to pick and choose
when they will be accorded treatment as persons (like demanding
"rights") and when they can hide behind the corporate veil.

[There's a difference between a volunteer, who contributes labor to a cause,
and an artist, who contributes a product. An artist is generally considered
a manufacturer by the government; they have to pay sales tax for retail
sales, for instance, while selling ones labor is exempt from that (at least
here in California). If a carpenter owns his own cabinet shop, and donates a
cabinet to a non-profit, it would be valued at full market value, unless he
called it "art". There's nothing that restricts this to corporations; if
you, as an individual, donate your car to charity, you get whatever they can
sell it for as a deduction. (It used to be Blue Book value, but they changed
that...)]

Please refer me to the relevant sections in the tax law that single
out artists. As far as I am aware. the tax laws for individuals do
not allow you to deduct for donations of your own labor, whether that
is volunteer labor or labor that went into a product like a cabinet.
It has nothing to do with whether you own your own shop, or whether
you are considered a manufacturer.

Look under "Contributions You Cannot Deduct" on page A-8 of your 1040
Forms And Instructions 2008. It specifically lists "Value of your time
or services". You are allowed to deduct only expenses you incurred,
such as cost of materials. These rules apply to all individuals, and
have been this way for at least as long as I have been filing Schedule
C and other business-related tax forms (over 20 years).

It would be very interesting to find out just where the corporate
perks come into play here. Consider a corporation consisting of
assembly-line artists cranking out "starving artist originals" the
way they do in third-world countries. Could the corporation
claim market value if it donated its products? If so, then just
how small a corporation would be eligible? It only takes 3 people
to form a standard corporation, so artist's co-ops would seem
to be eligible.

[I'm afraid you just made this up, Bob. It's owner-made art that's being
discriminated against here, not individuals or non-corporate entities. Under
current law as I understand it, if the corporation is considered the author
of the art, then all it could deduct would be the cost of materials. But if
it structured itself as an "art collection corporation" and bought the work
from the artists, then it could claim fair market value if it donated it to
a non-profit.]

Andrew Werby
www.unitedartworks.com

I wasn't "making this up" I was *asking* if were the case for
corporations, because I have never looked into corporate tax law like
I have had to look into personal tax law. I had never heard that a
corporation can claim market value if it donates its products, as
you claimed in your prior post, but it sounds dodgy. If Chevy
donates a new truck, would they be able to claim list price?
I certainly doubt it.

On the other hand, they may be able to claim the cost of materials
and labor, because the corporation has to pay for the labor.
That would be fair... just as if you as an artist donate a piece
that you paid someone else to build a base for, you could donate
the cost of your expenses, including the other person's labor.

You example of the "art collection corporation" is also true for
individuals: If you buy something that you then donate, you can
claim market value. In fact, I don't think you even have to buy it,
since the IRS regulations refer to "used items", but don't stipulate
that you had to buy them. Presumably this means family heirlooms
would qualify, even without a paper trail. But deductions over
certain amounts must have appraisals.

My point is that there is nothing in the regulations (as far as I've
seen) that singles out artists. It's not "owner-made art" that's
being singled out, it is "value of time and services". It's the exact
same rule that we all have to observe.

Best regards,


Bob Masta

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