How do you donate art to charity in a way that gets you the most tax benefits? Sometimes it’s obvious that no one is interested in taking on our collections once we’re gone. Sometimes we want to make sure each piece finds a good home long before we go. Other times we just have a lot of artwork collecting dust and want to make room for more without the guilt.
Whatever your reason for donating fine art to charity, there are ways to ensure you get the most out of every transaction. You’ll want to consult with a professional accountant experienced with art donations before making your final decisions, but here are a few tips to get you headed in the right direction.
- Calling All Collectors & Investors
- Choose Artwork You Have Owned For At Least 1 Year
- Select A Public Charity With Roots In The US
- Pick Art That Furthers The Charity’s Mission
- Decide On A Charity That Will Keep Your Art For At Least 3 Years
- Find An Appraiser Experienced With Charitable Art Donation
Collectors & Investors Only
You must first prove that you are an art collector or investor as defined by the IRS. Dealers, galleries, and artists are not subject to the same tax benefits.
One Year Minimum Of Ownership
If you are buying new artwork and intend to donate it, you’ll have to keep it for a little while – at least 1 year. Only then will it qualify as long-term capital property, letting you claim its fair market value as a deduction.
The Charity Must Have Roots In The US
The charity you donate your art to must be US-based. When donating to a non-US charity, check the IRS database for exemption status and get a letter of exemption from the organization for your record.
Does Your Donation Further The Charity’s Mission?
Yes, your donation should be artwork the charity will actually use. If you donate a painting and the university or museum you’ve chosen turns around and sells it, you can’t claim the tax deduction after all.
The Charity Must Keep Your Art For At Least 3 Years
Depending on the value of your artwork, you’ll also want to get an affidavit from the charity stating how they plan to use the work and how long they have or will use it. Get with your estate planner on the exact wording. If the value of your charitable donation exceeds $5,000, the charity needs to keep it for at least 3 years for you to claim a maximum deduction.
The Best Appraiser Is An Experienced One
Lastly, you will need to get a proper appraisal. An appraiser must possess certain certifications to provide the IRS with an acceptable valuation. Working with an individual or firm experienced with these types of donations will make the process faster and easier overall.
Ready To Add To Your Collection? Shop Now.
Now you know a little bit more about how to donate your fine art to charity. If you’re still building your collection or have recently made room for something fresh, we invite you to shop our California Thomas Kinkade Galleries in Carmel, Placerville, and Monterey.