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Art Donations and the Tax Man What Can You Deduct When You Donate Your Art?

It’s that time of year again — the dreaded tax season is upon us. Oh what fun! –not really.

 

Ok, so I’m not a tax expert and I definitely suggest talking to your tax advisor before making decisions about your tax filings. But, when it comes to charitable donations of artwork, it seems many people get it wrong.

 

When I do shows, I get approached all the time for donations of my artwork. The silent auction coordinator or person in charge of the featured charity makes their way around to all the booths looking for artwork. Inevitably the following phrase is issued from their lips “And if you donate a piece of artwork, you can deduct the fair market value from your taxes as a business expense”. WRONG – under current law an artist who donates their own artwork can only deduct the cost of their materials from their taxes – NOT the fair market value.

 

Remember the charity’s main goal is to get donations so they can turn around and get money for them. Telling artists that they can get a tax deduction is a nice incentive for people to donate and I’m sure the people making these statements believe what they are saying – but they usually aren’t tax experts either.

 

That doesn’t mean artists shouldn’t donate. Artists are among the most generous and least well paid individuals out there. We want to give but often the only thing we have to give is our artwork. We just need to be careful and give because we really are interested in supporting the particular charity and not be fooled into giving by some promise of financial reward or benefit.

 

Read more info about the tax repercussions for artists donating their artwork by Janice Roberg of Roberg Tax Solutions, LLC.

 

And artist and blogger Helen Klebesadel has some ideas for charities looking for art donations that might go along way toward helping artists. It would be really nice if in the future charitable organizations would take the concerns of their artist donors into account and enact some of these policies.

Tagged: Business of Art

Selling on the Internet – Seller Beware

Seller BewareI have needed to write this post for some time but have always hesitated because I don’t like dealing in the negative. However, I have decided that it’s just too important of a subject so here goes.

 

This is about what is commonly referred to as a “Nigerian Scam” (click to read the wikipedia article on the subject). You know like those scams where someone tells you they need your help getting a large sum of money that they are due and they’ll cut you in - IF you send them money to get past the legal fees. For some reason, artists seem to be a particular target.

 

In one type of scam they pose as a buyer but they are actually trying to get YOU the seller to send THEM money.

 

Here is how one type of these scams goes: Some one contacts you regarding purchasing artwork. You’ll email back and forth with them and finally come to an agreement on the sale of a piece of artwork. They’ll send a cashiers check and when it arrives it is for too much money. They’ll ask you to refund the difference or to give the overage to their shipper. Then low and behold, the cashiers check is a fake and you are out the money you’ve refunded them. Nice huh?

 

Now of course we don’t want to assume everyone who approaches us looking to buy a piece of artwork is a scammer, but we do need to be aware that these people are out there.

 

There are some typical signs that are often indicators of these types of scams:

 

  • Their english doesn’t seem very good or the wording may be a bit off. Now some people are just not very good at writing, so don’t discount someone soley on this basis.
  • They’ll be really vague in the wording, making you question if they’ve ever even seen your artwork.
  • They’ll be specific and name particular artworks, but then they’ll ask for the price on work that is clearly priced on your website.
  • They are often located in another country.
  • They’ll try to pressure you for time – often stating something like they’re in the process of moving to another country.
  • They’ll ask you to work with their agent or their shipper.

 

Basically, something in their emails will just seem off. If something in your gut is telling you to watch out, please listen to your instincts.

 

In addition, these people rarely target just one person. If you receive an email that seems a bit off, it never hurts to do a Google search for the sender’s email address. If you come back with a bunch of hits referring to this person as a scammer, you’ll know right away to steer clear.

 

Never ever refund someone money for an overage or pay any third parties- ask for a new check for the correct amount and make sure that it actually clears your bank before sending any artwork. Or, have them pay you through a service like PayPal- and make sure it clears there as well.

 

If you’ve received one of the emails and you are interested in following up, you can report the scam.

 

The Federal Trade Commission (website: www.ftc.gov) has a complaint form here: https://www.ftccomplaintassistant.gov/FTC_Wizard.aspx?Lang=en. They don’t resolve individual complaints but perhaps if they see a pattern forming they can do something about it.

 

Also, a lot of these scammers use free email addresses like those from Gmail, Yahoo or Hotmail. You could report it to his email provider and maybe at least they will shut down his email account.

 

To report to Gmail click here: https://support.google.com/mail/contact/abuse

 

To report to Yahoo click here: http://help.yahoo.com/l/us/yahoo/mail/ymail/spam.html

 

To report to Hotmail, you can send a complaint along with a copy of the abusive emails to the following email address: abuse@hotmail.com

 

If he’s using a different email provider you can usually find a way to report it to them on their website or by Googling something like “report email abuse to” and whatever his email provider’s name is.

 

Everybody be careful out there and protect yourself.

Tagged: Business of Art