John Hesselberth on wed 20 may 98
I don't often find myself defending an IRS regulation; however the one
that allows an artist to deduct only the cost of the materials is quite
consistent with other tax rules. What ClayArters seem to be puzzled by
is why we can't deduct the retail value of a pot we donate. What is the
retail value? It is basically the cost of the materials we bought plus
the value of the labor we put into making and selling the pot. We paid
money which we earned selling other pots to buy the materials.
Therefore, there is income that we report and something we paid money for
that we donate. If something we bought is donated it's expense may be
offset against income on your 1040 (but only once--most of us deduct the
cost of our materials as a business expense already. You cannot deduct
it a second time.)
Coming at it from a different direction: In theory, you could also deduct
the value of your labor if you first declared it as income--but you
don't. The time you donate to painting a classroom at your church or
that you spend helping your favorite charity raise money is not
deductible. That seems straight forward. So why should the time you
spend making a pot you donate be deductible. Bottom line--it is not.
The rules are consistent. Donated time is not deductible whether it be
time making a pot or time stuffing envelopes with flyers. The only thing
that is deductible is something you paid money for and that money, at one
point in time or another, showed up as reportable income.
Hopefully that is the last time I will have to defend the IRS, but fair
is fair. It's much more fun to take pot shots at them.
>----------------------------Original message----------------------------
>Paul
>
>do you or anyone else know what the governments rational for this policy
>is? and has anyone ever challanged it?
>
>Millie in MD. where the sun is wonderful!
>
>> while all those businesses
>> that donated goods and services can take the full price as a
>> deduction, the artists can take almost nothing!
>>
>> Paul Lewing, Seattle
John Hesselberth
Frog Pond Pottery
Pocopson, PA 19366 USA
EMail: john@frogpondpottery.com
visit my web site at http://www.frogpondpottery.com
"Why should we be in such desperate haste to succeed and in such
desperate enterprises? If a man does not keep pace with his companions,
perhaps it is because he hears a different drummer. Let him step to the
music he hears, however measured or far away." Henry David Thoreau,
Walden, 1854
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