Steve Slatin on sat 16 apr 05
Lovely! If enacted, will create lots of new income
opportunities for appraisers ...
-- Steve Slatin
--- Louis Katz wrote:
> I thought this might be a hoax it apparently is not.
> I found the text
> of the bill at:
>
> http://www.theorator.com/bills109/hr1120.html
Steve Slatin -- Pump don't work 'cause vandals got the handles.
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Louis Katz on sat 16 apr 05
I thought this might be a hoax it apparently is not. I found the text
of the bill at:
http://www.theorator.com/bills109/hr1120.html
Also a summary at the bottom of:
http://www.nwu.org/pic/0308arts.htm
Louis
On Apr 16, 2005, at 10:50 AM, Linda Arbuckle wrote:
> Artists'
> Contribution to American Heritage
John Rodgers on sun 17 apr 05
Paul Lewing wrote:
>on 4/17/05 9:13 AM, Steve Slatin at claystevslat@YAHOO.COM wrote:
>
>
>
>>John --
>>
>>Under current tax law, you may deduct the cost to you
>>of the thing you donate, or its fair market price,
>>whichever is lower.
>>
>>
>
>Which means that if you deducted those costs when you bought the materials,
>you get NOTHING for donating your work. You can't deduct those costs twice.
>Does that seem fair?
>Paul Lewing, Seattle
>
>______________________________________________________________________________
>
>
Paul, if one is incorporated - Schedule C or Sub-S - and receives a
paycheck from the corporation, then by proper accounting there should be
for the corporation a Cost of Goods Sold that includes labor. That cost
- which includes the labor - can be deducted. But you still cannot
deduct even the full wholesale price, much less the full retail price.
You can only deduct what it cost to make it - including the labor in the
case for the corporation.
One is not permitted to take a deduction for the profits donated - the
difference between the stated sale price and the cost of goods sold -
that one hasn't actually earned.
Regards,
John Rodgers
Steve Slatin on sun 17 apr 05
Paul --
Yes, to me it does. To my way of thinking, charitable
donations ought to be made with charitable motive --
that is, for the sake of the public good.
And if you've already written off a purchase in one
fashion (like as utilities and materials on Schedule
C), I'd consider it totally unfair for you to write it
off a second time -- or to write off more than you
paid.
The way the current system works, no one gets to write
off their own effort/time/skill/intellect/
training/education etc. Everyone gets to write off
acquisition cost or fair market value of their
donation, whichever is lower. If a car dealership
donates a new car for a scholarship drive (or the
equivalent) they can write off the cost to them -- not
the price they usually charge, which includes the time
they spend handling and prepping the car.
Works the same for us.
-- Steve Slatin
--- Paul Lewing wrote:
> on 4/17/05 9:13 AM, Steve Slatin at
> claystevslat@YAHOO.COM wrote:
>
> > John --
> >
> > Under current tax law, you may deduct the cost to
> you
> > of the thing you donate, or its fair market price,
> > whichever is lower.
>
> Which means that if you deducted those costs when
> you bought the materials,
> you get NOTHING for donating your work. You can't
> deduct those costs twice.
> Does that seem fair?
> Paul Lewing, Seattle
Steve Slatin -- Pump don't work 'cause vandals got the handles.
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Paul Lewing on sun 17 apr 05
on 4/17/05 9:13 AM, Steve Slatin at claystevslat@YAHOO.COM wrote:
> John --
>
> Under current tax law, you may deduct the cost to you
> of the thing you donate, or its fair market price,
> whichever is lower.
Which means that if you deducted those costs when you bought the materials,
you get NOTHING for donating your work. You can't deduct those costs twice.
Does that seem fair?
Paul Lewing, Seattle
Craig Clark on mon 18 apr 05
Paul, as an addendum to my earlier comments....no, the system is not
fair. Most systems are not fair. The tax system of our country is
particularly onerous though you might be surprised by similarly tedious
forms of taxation in other country's as well.
What has worked for me is to focus on the group that I am supporting
by donating my work, time and talent. There are several groups that I
believe in very strongly. I do not have buckets of money so I give them
work for fundraisers. Over the years the donations have raised many
thousands of dollars. It helps them and I feel good about it. That's the
key. Feeling good about doing something to help out dispite inherent
inequities/problems with the system.
The current plight of the "artist" in the tax system I believe can
be traced directly back to either the late 1960's or early 1970's where
some of the blue chip artists were gaming the system and deduction many
tens of thousands of dollars for works that they had not sold and then
turned around and donated to various causes. They of course deducted the
"fair market value." This activity ended up giving elements of the
congress who neither liked nor saw any value in the artistic community
in general ammunition.They were able to pander to their constituents.
The code was changed to only permit the deduction of the cost of goods
sold or the fair market value if less than the cost of goods sold.
Hope this helps
Craig Dunn CLark
619 East 11 1/2 st
Houston, Texas 77008
(713)861-2083
mudman@hal-pc.org
Paul Lewing on mon 18 apr 05
on 4/18/05 3:54 AM, Patricia Harden at Pharden@TRIAD.RR.COM wrote:
> You may deduct the fair market value of art you bought or traded and then
> donate to charity.
I believe, however, that you must thave owned it for a year before you can
get a deduction for donating it. If that's true, all you folks who were
thinking they'd just trade with another artist just before some auction
might want to reconsider.
Paul Lewing, Seattle
Jeremy/Bonnie Hellman on tue 19 apr 05
In order to claim a deduction for a charitable contribution, all taxpayers
must subtract the value of anything received in return. So if I buy your
Opus Magnus at a charity's fund raising event, presumably I've paid fair
market value, and I deduct nothing on my tax return.
All charities/religious organizations/schools/tax deductible organizations
are supposed to provide any taxpayers who contribute at least $250 in one
calendar year (regardless of the number of checks paid, it's the total
dollars that count) a letter stating the value of anything received in
return, or to state that no goods or services were received in return,
except (perhaps) intangible religious benefits. Many non-profits provide
this letter for contributions lower than $250. Really what the tax code says
is that taxpayers need this letter to claim a deduction for charitable
contributions to any single charity of $250 in a tax year.
IMHO artists are not subject to particular discrimination in the US tax
code. As others have correctly written, nobody gets to deduct the value of
their time. If you itemize deductions, you can include a modest
cents-per-mile for mileage driven for charity. This has been the case for as
long as I can remember.
Personally I'd rather write off the cost of my materials on my Schedule C,
where I also minimize the self-employment tax I pay, on top of my income
tax, rather than put it as an itemized deduction on Schedule A, where I
might get a deduction if I itemize, and perhaps I'll even get to deduct the
total cost of my contribution if I'm not subject to Schedule A phase outs.
These days anytime Congress gives a tax break to one group, they need to
find a way to recoup the revenue from another group. Virtually all tax bills
(over time) need to be revenue neutral for the country.
Bonnie
Bonnie Hellman, CPA
Happy that April 15th is come and gone so I can again think about ceramics
> Hi John,
>
> We are starting to get in deeper than my knowledge of the tax law
> goes--where is Bonnie when you need her?? Since it is only a few days
> after tax day she is probably goofing off on some Caribbean island.
>
> But I am betting the buying can only deduct what is in excess of fair
> market value. When you buy a membership to a tax exempt organization
> that includes something (like admission tickets to the Philadelphia
> Flower Show--that one comes to mind) the receipt will clearly say how
> much value you received and that you can only deduct the difference.
>
> John
----- Original Message -----
From: "John Jensen"
To:
Sent: Monday, April 18, 2005 12:57 AM
Subject: Artist Deduction Bill
John H;
I think your various explanations on this tax deduction subject are quite
clear and, as far as I can tell, correct. In any case, you makes sense to
me.
I wonder: In those cases in which an artist donates a piece of work which is
subsequently sold at auction, is the buyer able to deduct the amount paid
for the object as a charitable contribution, even though they obtained value
in exchange? Or does the tax code consider our contribution of art to be
just a little "thank you trinket" which has no value in and of itself?
John Jensen, Mudbug Pottery
John Jensen@mudbugpottery.com
http://www.toadhouse.com www://www.mudbugpottery.com
>
The stranger who buys your $100 piece, donates it to charity, and
claims the deduction is in exactly the same financial position. How do
you think they got that $100? They earned it and had to declare it as
income first. You just didn't see that part of the transaction, but it
was there.
I repeat. There is no unfairness in the current system. It is perfectly
consistent. Perhaps one of the few tax rules/laws that is.
Regards,
John
----- Original Message -----
From: "John Hesselberth"
To:
Sent: Monday, April 18, 2005 4:52 PM
Subject: Re: : Re: FW: Artist Deduction Bill
> On Monday, April 18, 2005, at 12:57 AM, John Jensen wrote:
>
>> is the buyer able to deduct the amount paid
>> for the object as a charitable contribution, even though they obtained
>> value
>> in exchange?
>
Kathi LeSueur on wed 20 apr 05
Craig Clark wrote:
>
> ............. The current plight of the "artist" in the tax system I
> believe can
> be traced directly back to either the late 1960's or early 1970's where
> some of the blue chip artists were gaming the system and deduction many
> tens of thousands of dollars.........
No, the "current" plight of the artist is that every charitable
organization is seeking donations from artists for their silent
auctions. This is their new (and in many cases not so new) way to raise
funds. I receive requests from all over. From organization I've never
heard of. They all tell me my donation is "fully tax deductible". They
believe it is. They insist on giving me a letter for my deduction. I
tell them it's worthless to me. They don't belive me. So, I only donate
to causes that I would give money to. There are very few of them.
Kathi
John Jensen on wed 20 apr 05
Thanks to Bonnie and all for clarifying the facts deductions for charitable
giving of artwork. Especially around tax time it is easy to get one's
thinking muddied up by the emotions. At least in my case, I don't always
think as clearly around tax time as I might otherwise.
One of our local institutions is organizing a fundraiser this year which is
paying artists one fourth of the price obtained at auction for the art work
contributed. This strikes me as a very balanced way of encouraging all
participants to feel good about the situation, and should draw out some of
the artists better works.
John Jensen, Mudbug Pottery
John Jensen@mudbugpottery.com
http://www.toadhouse.com www://www.mudbugpottery.com
Subject: Artist Deduction Bill >(excerpt)
In order to claim a deduction for a charitable contribution, all taxpayers
must subtract the value of anything received in return. So if I buy your
Opus Magnus at a charity's fund raising event, presumably I've paid fair
market value, and I deduct nothing on my tax return.
eutral for the country.
Bonnie
Bonnie Hellman, CPA
Happy that April 15th is come and gone so I can again think about ceramics
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