1. Tax deductions for donating artwork to charity may be reduced if the charity’s use of the artwork is unrelated to its tax-exempt status, and will be limited to the amount of capital gain that would have been realized if the artwork was sold.
2. If the deduction is less than $250, a receipt from the charity and reliable written records are required. For deductions between $250 and $500, an acknowledgment from the charity is necessary, including a description and estimate of the value of any goods or services received in return for the donation. For deductions over $500, written records about the artwork’s acquisition and cost basis, along with completing an IRS form, are required. – Donations valued over $5,000 require an appraisal by a qualified appraiser.
– If the total deduction is $20,000 or more, a signed copy of the appraisal must be attached to the IRS form.
– The deduction may be limited to a certain percentage of the contribution base, depending on various factors.
– Gifts of partial interests in artwork have special requirements.
– For guidance on large charitable gifts and the best tax outcome, contact taxinsights@nksfb.com or rwelling@nksfb.com. – Tax filing deadlines have been extended due to the ongoing pandemic
– The IRS has implemented new rules regarding cryptocurrency reporting
– There are new tax incentives for businesses investing in renewable energy sources
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