Tax Deductions for Art Gifts - USA

The IRS rules require that you have owned the artwork for a minimum of 12 months and that the artwork is donated to an IRS-approved charity. The amount you can deduct on your tax return for a charitable donation of art is the appraised fair market value (FMV) of the artwork. If the FMV is less than $5,000, then you are not required to file an appraisal completed by a "qualified appraiser" in support of your deduction. If you are claiming a fair market value above $5,000, you will be required to file an appraisal in support of the deduction.   

The actual cost you paid for the artwork is irrelevant to the amount you can deduct, so if you are able to obtain the artwork a minimum of 12 months before the donation at a discount to the FMV at the time of the donation, then you gain an advantage by being able to deduct more than you actually paid for the artwork.  

Therefore, you may be able to donate art to charity and potentially deduct more that your cost.  IRS Publication 561 provides information on determining the fair market value of art donated to qualifying charities, and the relevant section of the publication is published below.

Extract from IRS Publication 561 – Determining the Value of Donated Property, Painting and Objects of Art: 

“Your deduction for contributions of paintings, antiques, and other objects of art, should be supported by a written appraisal from a reputable source, unless the deduction is for $5,000 or less. Examples of information that should be included in appraisals of art objects - paintings in particular— are found later under Qualified Appraisal. Art valued at $20,000 or more. If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the signed appraisal to your return.  

For individual objects valued at $20,000 or more, a photograph of a size and quality fully showing the object, preferably an 8 x 10 inch colour transparency no smaller than five inches, must be provided upon request. McPherson Station, Washington, DC 20038”  

You can obtain more information on Art Gifting and Tax in the US by visiting http://www.irs.gov/pub/irs-pdf/p561.pdf