Legislation Affecting Artists

[Julie Deane]

How ironic, to be notified of an American bill via an international artist.
Thanks so much, Bonfim. Let's all take action and have our voices heard to get this inequity fixed!

[Richard Bingham]

Originally Posted by Julie Deane

. . . Let's all take action . . .

With all due respect, why ??

Consider that adding yet another layer of stipulations to the already impossibly complicated tax code is not exactly a good thing, and a sword that can impose a standard for "market value" will undoubtedly cut both ways.

This instance has precedent in that, should a surgeon or attorney (e.g.) who earns $250 per hour) "donate" time to a benevolent cause, they may deduct attendant expenses such as mileage, or per diem compensation in doing so, but NOT their time. This is a good thing. When it comes to filling bowls in a soup kitchen, or swabbing the deck in a halfway-house, a professional's expertise is no more valuable than someone who earns minimum wage. In some cases, maybe it's less.

The issue is hardly a question of import to most art professionals anyway . . . if you want to donate a painting, do so freely, with good will, rather than thinking of it as a tax dodge. The difference in what you pay on April 15 will be pennies, anyway.

The other side of this coin is that in truth, this kind of "donation" is possibly the worst thing artists can do in terms of maintaining "real" valuation if there exists an active market for their work. Invariably, a piece is "valued" at less than the dollar-six-eighty spent on materials . . . (been dere, done dat . . .) Let the hobbyists and amateurs donate their paintings.

[Alexandra Tyng]

Thanks, Bonfim. I agree with Julie, with no disrespect to you, Richard.

If X buys my painting for 10,000, X can donate it to an organization and report it to the IRS as a $10,000 deduction. But I, the artist, can't deduct more than the cost of time and materials, even though I'm not just donating time and materials, I'm donating an actual object that I can prove to be worth $10,000.

I have donated pieces in spite of this, and I do so to benefit the cause. Even if I did get a tax break I wouldn't feel differently about it. A few years ago I donated a portrait to the JDRF and got nothing except the pleasure of knowing I truly gave something to help diabetes research. The people who bought the portrait paid the money but they got the portrait in return, as they would have if they had simply commissioned me to do it, except we both knew the money was going to a charitable cause. The artist is the one who actually gives something without getting anything in return.

Many artists cannot itemize deductions because not enough percentage of their income goes to donations. Why should an artist not be able to take advantage of itemization even though they have donated works totaing a sizable portion of their income?

I personally haven't noticed that my donations have had a negative impact on the value of my work.

Why should I feel bad about adding one more tax law to the already complicated system? Actually I think this would be a tax reform.

[Richard Bingham]

Originally Posted by Alexandra Tyng

. . . no disrespect to you, Richard . . . Many artists cannot itemize deductions because not enough percentage of their income goes to donations . . .

I rely on that, Alexandra - none taken! That's why this is such a pleasant forum.

This just in . . . I checked with my tax professional, and was told that you can take the full price of the painting as a donation so long as you can substantiate a real market value for the piece. This precludes hobbyists from claiming "blue sky" value for their work. Again, not a bad thing.

And, a reminder (from my tax pro) to account for all aspects of the cost of doing business . . . we tend to miss a lot of 'em because of the peculiarities of our profession.

As for feeling bad, naw. Don't feel bad . . . and I agree, since "reform" might be even worse than what we have as a tax system, amendments where necessary are better than nothing, and surprisingly, the IRS is responsive to such pressures.