Special Message

[Ed Davidson]

Click on this link to read a special message from the AAW President.

 

[Mark Wollschlager]

Wow, there are a couple of big changes there.
I suppose there will be more details at a later date about all of the topics.

Mark.

 

[Steve Worcester]

(thinking out loud) If I donate to the EOG auction, and then take my %50 and donate that back to the AAW, I get a write off for the money.

Anyone know if I can do that?

 

[Gretch Flo]

Donations

A couple of years ago my accountant (needed for just one year so no contact since) said if I donate an item, I can just deduct the cost of materials. But if it is auctioned off, then a value has been placed and then I can deduct the price paid by the buyer at the auction. Is this no longer true??? Gretch

 

[hockenbery]

Hi Steve,
It seems quite straight forward.
These would be independent events and the answer would be yes

But why?
unless you achieve a benifit the income goes to a business and the contribution is from the individual it would be zero sum endeavor.

addition to gross Income equals $x
addition to deductions = $x

change to net income =$0

(thinking out loud) If I donate to the EOG auction, and then take my %50 and donate that back to the AAW, I get a write off for the money.

Anyone know if I can do that?

 

[Jim Stoppleworth]

A couple of years ago my accountant (needed for just one year so no contact since) said if I donate an item, I can just deduct the cost of materials. But if it is auctioned off, then a value has been placed and then I can deduct the price paid by the buyer at the auction. Is this no longer true??? Gretch

I would like that clarified to current tax rules as I always have had the understanding of cost of materials period for a donation. Anybody know for sure that an auction still makes a difference?

Jim

 

[Barbara Gill]

I would like that clarified to current tax rules as I always have had the understanding of cost of materials period for a donation. Anybody know for sure that an auction still makes a difference?

Jim

I just checked with my sister who is a big shot CPA. She pointed out that the donation (in this case to AAW) is made before the value is established. So the answer would be no, only the value of the materials and I guess that would have to be documented.

 

[Angelo]

Tax Question

Barbara,

Under the new auction rules, the person making the donation can state the "suggested retail price" of which they can elect to accept up to 50% of the S.R.P. On pieces that don't reach the S.R.P. in the auction the donor can accept up to 50% of the lower figure.

Or, more simply, the minimum value is now estalished before the auction. Would that change the zero deduction amount?

Angelo

 

[Barbara Gill]

Barbara,

Under the new auction rules, the person making the donation can state the "suggested retail price" of which they can elect to accept up to 50% of the S.R.P. On pieces that don't reach the S.R.P. in the auction the donor can accept up to 50% of the lower figure.

Or, more simply, the minimum value is now estalished before the auction. Would that change the zero deduction amount?

Angelo

Angelo, I am not a tax person however the IRS does not seem to be interested in accepting a value placed by the artist. My sister told me that even with major manufactures only the cost of materials can be considered as the deduction value (I would assume for instance GM donating a car). She said in most cases it isn't worth the trouble of keeping records for that type of deduction. Of course monetary donations are another story.

 

[Jim Stoppleworth]

I just checked with my sister who is a big shot CPA. She pointed out that the donation (in this case to AAW) is made before the value is established. So the answer would be no, only the value of the materials and I guess that would have to be documented.

That's interesting almost all groups asking me for a donation ask it's value when they pick it up. Since I sell the same type of item in our store for x$ does that mean the value is established? Sounds like a question I need to be asking our tax person.

Which I just did and tax person/CPA says cost of materials only. She knew specifically because she had just gone through this with a professional artist who wanted to take a $10,000 donation for a painting he donated because that was his going rate for the style of painting he was donating.

 

[Barbara Gill]

That's interesting almost all groups asking me for a donation ask it's value when they pick it up. Since I sell the same type of item in our store for x$ does that mean the value is established? Sounds like a question I need to be asking our tax person.

Which I just did and tax person/CPA says cost of materials only. She knew specifically because she had just gone through this with a professional artist who wanted to take a $10,000 donation for a painting he donated because that was his going rate for the style of painting he was donating.

They are probably asking for a value so they know how to start the bidding and what information to use in the publicity and catalog.