Tax Insights: Art Donation Deductions

Donating paintings or other valuable items can yield a substantial tax deduction. And while art and collectibles have been increasing in value, but there are certain things that need to be considered when deciding to donate:

  • Donations only qualify for tax deductions when made to eligible charitable tax-exempt organizations using the gift for the public good.
  • Most property donations will not have a recognized published value; property deductions more than $5,000 in value must be determined by a qualified independent and certified appraiser.
  • Appreciated personal property can only be deducted at fair market value if the donated item directly relates to the organization’s mission.
  • A donated item on display provides future enrichment to others, but many museums have such large stock that a donated painting may be infrequently shown or placed in storage.
  • Consider whether selling the item could provide more funds that could be used for cash donations.

Tax savings for donated art depend on numerous factors. Circumstances vary depending on the situation, and a financial analysis can provide a potential donor with valuable insight into making the best choice. Read more about art donation deductions in our tax insights document here