After hearing someone complain for the umpteenth time “It isn’t fair to have to pay for an appraisal, when I am giving something away!”

At first I agreed and then I rethought about her comment, after she asked what the alternatives were.

The alternatives are

  • donate the item and take under $500 as its fair market value, so an appraisal is not required
  • donate the item and take no deduction
  • give the item to your kids, provided its value does not exceed the maximum allowed per year non taxable
  • do nothing and it can be in your estate sale

These steps rejected, brought us back to the premise, paying money to have a professional set and defend the item’s value, in the course of giving something away.

Since the taxpayer is receiving a deduction toward their federal income tax responsibility, donating art is NOT a gift.  You are trading an object and the cost of an appraisal for a reduction in your tax burden.  Therefore your cost in this trade is what was paid for the item coupled with the cost of the appraisal.  In some cases the cost of the appraisal is a deductible expense.

Sometimes a more accurate perspective is helpful to digest one alternative in “gifting” appreciating property (artwork).

Since the Nixon papers, charities/ museums have been disqualified to pay for the appraisal.

Corinne Cain, ASA

Accredited Senior Appraiser/  Fine Arts & American Indian Arts