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Question Can one write-off the donation of a mural?

Context: A mural was "donated" to a local community municipal building by painting it free-of-cost onto the side of the building. This was done in conjunction with the local-government's beautification efforts. It is a mural that would normally cost around ~$10,000 given its size and detail.

My Understanding and Confusion so Far: I have read here that one cannot write off pro-bono hours. But, the hours spent on this project amounted to the creation of a piece of art. This art was created on public property and the cost of materials was covered by a local village association. So, we cannot write off any expenses from the project other than time (which as seen above cannot be written off). But, the end result was the community "receiving" a good, not necessarily a service or hours. So, I am unsure if this is a donated piece of art (can be a write-off) or a service (can't be a write-off).

Location: I am in the US and in Indiana specifically

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    Oh the irony of your username when asking how your art should be interpreted for tax purposes! – JohnFx Oct 29 '20 at 15:26
  • Is the " local community municipal building" owned by a government or a non-profit? Can donations to a government be written off? – Freiheit Nov 3 '20 at 15:32
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The term "write off" refers to when you take money that the IRS would otherwise consider income, and tell them that it wasn't income. If there is no money, there is no write-off. If you buy a mural, then donate it, then the money you paid for the mural is considered to not be income (because ultimately it went to the charity rather than you), so you can write that money off (with caveats). If you make a mural, there is no money that would otherwise be considered income, so there's nothing to write off. That's why donated services are not tax deductible: you never received payment for your services in the first place, so you don't have it as income to deduct.

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  • The conclusion is good, but the path is not quite accurate. My (person, doesn't matter who) dies, and leaves me a Painting. The history of it doesn't matter much. She might have created it a half century ago, or bought it, or inherited it. As long as I get it appraised, and have my paperwork in order, I get the deduction. In this case, no money need ever have exchanged hands. (But, again, you reached the correct conclusion) – JTP - Apologise to Monica Nov 3 '20 at 19:52
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This question comes up a lot with people who provide service based work to non-profits: "Can you deduct the cost of the time spent?" The easiest way I've found to explain it is this:

  1. Charge the non-profit your normal price.
  2. When finished, donate all of it right back to the non-profit.

If they had done this, from the artist's point of view, there would be $10K in additional income which is offset by the $10K donation (assuming they itemize). From the city's point of view, they have $10K in expenses offset by the $10K donation. The net effect is (basically) a wash for both parties. (Note their may be some slight differences based on various circumstances.)

Note had the artist not been reimbursed for the cost of materials (paint and supplies), they could have deducted that.

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  • The tax code is remarkably complex. I assure you, if I add $10,000 to my income, and to my donations, it will not be a wash. Good chance I'm out $1000 or more. Just start with the fact that the $10,000 is self employment income, subject to FICA x 2. And MAGI goes up with the deduction taking place further down the form. When we first retired, I thought that if we pushed into the next bracket (via IRA withdrawals from my wife's acct) I've have a chance to deposit up to $6K from my part time work. Simple enough. But not a wash. – JTP - Apologise to Monica Nov 3 '20 at 19:57
  • @JTP-ApologisetoMonica good point. I reworded to consider your comment. – TTT Nov 3 '20 at 20:11
  • @JTP-ApologisetoMonica Regarding FICA, wouldn't the business' donation reduce the income and avoid FICA on that income? – TTT Nov 3 '20 at 20:13
  • Hmmm. Yes. Good point. – JTP - Apologise to Monica Nov 3 '20 at 20:15

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