Alumni Art Submission - Mount Vernon Nazarene University (Page 2 of 2) in pdf

Considerations R elated t o G ifts o f A rt

The d onor i s e ncouraged t o c ontact h is/her f inancial a dvisor f or a ny t ax a dvice.

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It i s t he d onor’s r esponsibility t o e stablish t he v alue o f t he d onated i tem f or t ax d eduction p urposes.

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In a ll c orrespondence w ith t he g ift-‐in-‐kind ( GIK) d onor, t he c orrespondence w ill n ot d eclare t he G IK’s e stimated

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dollar v alue.

The d onor m ust f ile F orm 8 283 w ith h is/her t axes t o c laim a d eduction f or a ny g ift v alued a t $ 500 o r m ore. I f t he g ift

value i s $ 5,000 o r m ore, t he d onor m ust p rovide t o t he I nternal R evenue S ervice ( IRS) a n a ppraisal i n a ddition t o F orm

8283 a nd o btain t he s ignature o f a M ount V ernon N azarene U niversity r epresentative i n U niversity A dvancement. A

copy o f t he a ppraisal m ust b e p rovided t o U niversity A dvancement. W hen a G IK e xceeds $ 5,000 i n v alue a nd h as b een

reported o n I RS F orm 8 283, M ount V ernon N azarene U niversity m ust r eport t he d isposition o f t he G IK t o t he I RS ( if

disposition o ccurs b efore t wo y ears h ave p assed s ince t he i tem w as d onated). T he u nit/department i n p ossession o f t he

item h as t he r esponsibility o f r eporting t he d isposal t o U niversity A dvancement. T he I RS c an a ssess p enalties f or n ot

reporting d isposal o f g ifts. A s a c ourtesy, I RS F orm 8 283 w ill b e s ent t o e ach a rtist s ubmitting w ork f or t he a uction.

For t he a rtist:

The I RS m akes a d istinction b etween d onating a n i tem t o a c haritable o rganization t hat q ualifies f or c apital g ains

treatment i f s old a nd d onating a n i tem t hat w ould q ualify f or o rdinary i ncome t reatment i f s old. I tems d onated b y a n a rt

collector w ho h olds e ach i tem f or o ver a y ear w ould l ikely q ualify f or c apital g ains t reatment a nd e ntitle t he d onor t o a

charitable d eduction e qual t o t he a ppraised v alue o f t he w ork. H owever, a n i tem d onated t o t he o rganization b y t he

artist w ho c reated t he i tem w ould b e t reated a s o rdinary i ncome p roperty a nd t he d eduction l imited t he c ost b asis o f

the a rtist ( Per T reas. R eg. 1 .170A-‐4). S ince t he w orks o f a rt b eing d onated t o M VNU a re o riginal w orks b y t he d onors,

their c ost b asis w ould b e t he a mount o f m oney e ach a rtist s pent o n s upplies t o c reate t he w ork o f a rt. P er I RC S ection

170(e)(1)(A).

MVNU d oes n ot n eed t o k now w hat t hat c ost b asis i s -‐ t hat i s b etween t he d onor a nd t he I RS. A t hank y ou l etter w ill b e

sent t o t he a rtist f rom M VNU w ith a s pace f or t he a rtist t o i nsert t he c ost b asis.

References:

Art f or L ife

Critchfield, C ritchfield & J ohnston L td.

IRS P ub. 5 26 – C haritable C ontributions

IRS P ub. 1 771 – C haritable C ontributions, S ubstantiation & D isclosure R equirements

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