Are you thinking about selling one of your Fine Art ‘pieces’? If so, there are numerous questions going through your head right about now: How much time and effort will I have to put into the selling process? What would it cost to have someone… preferably an Upscale Gallery, help me sell it in the proper venue, etc? Or, how much can I personally get for my Fine Arts if I try to sell it on my own?
We have two words for you: Charitable Contribution!
Many people do not think about this option because it does not give them immediate profit. But, you have to remember selling your Fine Arts is a long process in itself. It could take months, or even a full year to get your Art sold and to receive the payment for it.
Instead think about this:
There is much less time and effort involved with Charitable Giving than when Selling your Fine Arts. You might be able to take the entire amount as a tax credit under Charitable Gifting, or perhaps, it could give you a Tax Deduction for many years. Now you have helped someone or some cause tremendously and still you were able to benefit from this action.
Think about this: If you are planning to sell… Your ‘piece’ must be clean, handsomely framed, AND THEN smoothly presented to a Consignment Gallery or for showing to a possible buyer. Whereas, if you do decide to contribute, rather than sell, you may well end up with a CARRY-FORWARD, PASSIVE LOSS, which sounds complicated, but actually is not. It can be extraordinarily helpful in today’s world. It means you may have a tax deduction for several years, going forward.
Now that I have you thinking about Charitable Contribution, you might be wondering what the exact process is in getting this done:
Four Things you, for sure, need to do:
1.) You must get the TAX I.D. number for the non-profit organization to which you are contributing.
2.) Their signed letter (by someone on the Board of Directors) of acceptance, specifying your item, by name and description.
3.) The Price you and the organization have agreed upon, noted in the body type of their letter.
4.) The Federal form #8283, signed by me, or your current appraiser, for the year in which you are Giving. You will have to contact me/your appraiser at that time.
You have to … have to.. make sure these steps are done properly. If it is going into auction, you need to make sure you know what your Fine Arts will be auctioned off at, and/or write down the known value, the one given to you by a qualified appraiser. Which means, yes, you must have the artwork appraised! Trust me, I have seen paintings, which valued highly, auctioned off at a much lower price, which means their Tax deduction will be little as well.
As always, check with your C.P.A./ Tax Advisor before Charitable Gifting, since Tax laws change each and every year. Than give us a call and we will be happy to be Your Trusted and Loyal Fine Arts Appraiser.
(Photos: from Dreamstime Free Images)