As an artist, I'm often asked to donate a one of my paintings for fund raising events to non-profit organizations. My tax preparer said I can only claim the actual cost of materials as a tax deduction, and the labor or fair maket value is irrelvant. Is this true?
2007-03-24 17:04:46 · 5 answers · asked by Carol W 1 in Business & Finance ➔ Taxes ➔ United States
I don't think so. If you sell paintings of similiar quality, you can use the value of these paintings to estimate the cost of the painting that you donated. For instance, if you generally sell a painting for a thousand dollars, then you can deduce that if you had not given that painting to Save the Whales or whatever, you could have sold it for a thousand dollars. Just like when you donate clothing to a homeless shelter, you can deduct the price of what the clothing was worth if you sold it used.
2007-03-24 17:09:02 · answer #1 · answered by mspicer0005 2 · 0⤊ 2⤋
Your time and labor are irrelevant. Since you are in the business of selling paintings, you donated inventory. See page 10 of pub 526. I would think that your cost basis them would be the materials.
2007-03-25 13:01:14 · answer #2 · answered by CarVolunteer 6 · 0⤊ 0⤋
Yes it's true. The value of your time and labor is not deductible as a charitable contribution.
2007-03-25 00:16:52 · answer #3 · answered by Judy 7 · 1⤊ 0⤋
You need a new accountant.
When you make a donation of goods, the donation can be deducted for fair market value in most cases. Of course, in an audit you would need to be able to "prove" the market value. However, if the charity event gives you a reciept acknowledging your donation your accountant should be able to work out the details.
2007-03-25 00:08:41 · answer #4 · answered by bardsandsages 4 · 1⤊ 4⤋
if it came from a tax pro its tru cause usually they want to get you all they could get
2007-03-25 00:06:56 · answer #5 · answered by cvegas229 5 · 0⤊ 2⤋