Art Donations 101: a Guide for Artists, Collectors, and Nonprofits

By Hannah Tager

In the Summer 2019, the Center for Art Law hosted its first charitable auction, during which it considered: how can artists and donors receive tax benefits for donating artworks to a non-profit organization? As it turns out, the answer is a bit lengthier than one might expect.

The Current Legal Landscape

The Tax Cuts and Jobs Act of 2017^[1] brought about large changes to all areas of taxation, deductibles included—as a reminder, if something is tax deductible it means that its value can be subtracted from the taxpayer’s legally taxable income. Due to this broad reform, publications pertaining to tax code are now outdated if not obsolete (including this previous publication by the Center on the topic). For a recent guide on the subject of art donations as deductibles please see IRS Publication 526 (2018), Charitable Contributions, which summarizes the Internal Revenue Code Section 170: Charitable, etc., contributions and gifts. Intended as a general guide (and not as a checklist), this article focuses on these IRS publications, highlighting pertinent sections of the tax code for artists, collectors, and donors interested in giving charitable donations of artworks.