Art Valuation

[Jill Graff]

Client donated 4 paintings that cost a total of $11,000. The appraised FMV was $19,000. Do they get deduct cost or FMV? I am asking because my software is giving me problems with this. Thanks in advance.

[Matt Sova]

Fmv

They get FMV deduction. However, there are limits to the contribution based on AGI. If it is not a 50% AGI limit charity then the deduction may be limited to 20% of the AGI since this would be capital gain property. Perhaps that is why it is not letting you take the full amount. The amount that cannot be utilized should end up being carried forward.

If AGI limit is not the issue, it could be your software. I put those amounts in on a high income taxpayer in my system and it came out with $19k

[New York Enrolled Agent]

Client donated 4 paintings that cost a total of $11,000. The appraised FMV was $19,000. Do they get deduct cost or FMV? I am asking because my software is giving me problems with this. Thanks in advance.

Hard to answer your question without more information.

Holding period would determine whether you use cost or FMV. If FMV, generally limited to a 30% of AGI but you can elect to 50% by reducing the appreciation. There's more ...

[Kram BergGold]

Use

In order to claim FMV the organizatyion that receives the art must utilize it in it's mission. If they sell it, then deduction is limited to cost.