What are the tax advantages of giving artworks and how does the giver take advantage of them?
Section 170 (a) of the Internal Revenue code (IRC) allows deductions on federal income tax returns on part or all of the appraised value of a gift to a 501 (c) (3) organization. Most museums qualify as a 501 (c) (3) organization, but it is important to check that the recipient of your artwork gift has this tax designation. Art is described by the IRS as “paintings, sculptures, watercolors, prints, drawings, ceramics, antique furniture, decorative arts, textiles, carpets, silver, rare manuscripts, historical memorabilia and other similar objects.” If you would like to gift any of these items and to receive a deduction on your income tax return, the key is to have the artwork appraised for its FAIR MARKET VALUE AT THE TIME THE GIFT IS GIVEN. If the value of the gift is under $500.00, no such appraisal is required. But for art items valued above $500.00, it Is necessary to provide the appraisal and IRS form 8283 entitled “Non Cash Charitable Contributions.” If the art item exceeds $20,000
