The art season isn’t the only thing that kicks off in the fall—autumn is also the ideal moment to revisit your philanthropic and financial plans. With only a few months left in the calendar year, now is the perfect time to consider whether donating art, antiques, jewelry, or other valuable assets can both advance your charitable goals and provide meaningful tax benefits.
Timing is critical. You must have owned the piece for at least one year before donating to deduct the item’s current fair market value (FMV). If you donate sooner than a year, the IRS limits your deduction to either your cost basis (purchase price if known) or the FMV at the time of the gift, whichever is of lower value.
For example, you purchased a painting for $25,000. Within the year, comparable sales show similar works trading for $60,000. Donating before the one-year mark would limit your deduction to your cost basis of $25,000, not its higher FMV. Waiting until you pass the one-year threshold allows you to deduct the higher $60,000 FMV.
If you have held the piece for more than one year but its FMV has dropped below your cost basis, you still cannot deduct the higher cost–you many only deduct the FMV. For example, you purchased a painting for $25,000. If the FMV dropped below your cost basis to $18,000, your deduction would be capped at $18,000.
The cost basis or price you originally paid for the donated piece does not guarantee your deduction value. The IRS bases charitable deductions on the current FMV if the piece is held for more than one year and the charity’s intended use is related to its mission (more on this below). Otherwise, your deduction is limited to the lesser of FMV or cost basis. Even if you paid significantly more for a piece, you cannot claim a deduction higher than what the artwork is worth on the date of donation.
For example, you spent $10,000 on a piece that has a current FMV of $6,000. Your deduction is $6,000, not $10,000. It should also be noted that expenses such as shipping, framing, or conservation costs cannot be added to the deductible value.
For you to claim full FMV of a donated piece as a tax deduction, the non-profit charity’s intended use of the item must align with its mission. For example, you may deduct the full FMV if a work of art is donated to an art museum if it remains in its collection for at least 3 years.
It’s important to note that if the charity sells your donated piece instead, your deduction may shrink to a lesser value. Also, if the charity sells the item within three years, you may have to repay part of your deduction.
The IRS leaves little room for error.
Accuracy is critical. Overstating value can trigger IRS scrutiny, penalties, and legal issues. Consider the recent case of philanthropist Oscar Tang, whose donation of ancient Chinese paintings to The Metropolitan Museum of Art was appraised by an auction house at $74 million and was challenged by the IRS, resulting in reduced deductions, IRS penalties, and significant legal fees. Even generous gifts need defensible, ironclad appraisals.
Donating artwork can be deeply rewarding, but only when handled correctly. Art Peritus’ reports are IRS and USPAP-compliant to safeguard donors and their charitable intentions.
We work with Appraisers Association of America (AAA) certified specialists in the relevant category. When appropriate, we pair these appraisers with seasoned market insiders—dealers or private-sale experts—to ensure values reflect both compliance and current market conditions.
Every report is personally reviewed by Jennifer Garland Ross, AAA, Art Peritus’ founder and principal with over 25 years of art appraisal expertise. This guarantees accuracy, nuance, and consistency.
At Art Peritus, we give clients preliminary FMV ranges so there are no surprises when the formal appraisal arrives—especially if the cost basis (purchase price) and FMV differ significantly. We’ll also verify the donation’s related use and confirm the qualifications of your chosen charitable institution to ensure there won’t be issues with your donation.
We never finalize a report without the deed of gift. Producing a report too early can invalidate your deduction. This policy ensures compliance and avoids timing pitfalls if donations are delayed by shipping or scheduling.
The property’s condition affects its FMV. Since the IRS now allows virtual appraisals, we can coordinate with museum curators or conservators for condition documentation, as well as advise whether conservation before donation could yield a higher FMV—or whether donation in as-is condition is sufficient.
Art Peritus guides the entire process. We complete a formal IRS-compliant report with comparables supporting our fair market valuation. We fill out our portion of Form 8283, guide you on obtaining the donee’s signature, and we’ll ensure your documentation is ready well before your tax filing deadline.
Donating art or valuables is one of the most powerful ways to align passion, philanthropy, and smart tax planning—but only if done with care. Art Peritus delivers accurate, comprehensive, defensible appraisals so you, your advisors, and donor-advised funds can proceed with confidence. With our guidance, your gift benefits both your chosen cause and your financial well-being.
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