Here’s the scenario: Your friend at Charity X wants you to donate one of your paintings to their upcoming fundraising auction. You’re on the fence, but she mentions the tax deduction, and so you agree. After your painting sells at the event, you get a letter from Charity X, intended for your tax records, stating the price your piece sold for.
This scenario is misleading to the artist. The charity is implying that you can take a tax deduction that you are not actually entitled to.
I want to pause and say that I think most charities are doing good work and don’t intend to mislead artists. But many of them hope the rosiest possible scenario is true, and haven’t checked the facts.
So here they are.
Your painting is what the IRS calls a “self-created asset.” As such, the rules are clear: you can only deduct the cost of the materials. And let’s face it — for most artists, much of the value is in the labor — the materials by comparison are minor.