Today’s Art Marketing Action newsletter (note new name!) discusses the tax pitfalls for artists who donate artwork in the U.S.
I’d like to call your attention to a fantastic resource (thanks, Mary, for the reminder!). The Society of North American Goldsmiths has numerous articles for artists as part of their Professional Guidelines series. The one on donating work is valuable for artists who are considering donating works. It also has terrific information for organizations and galleries who are asking for art donations from artists. It’s a good tool to help you educate those on the other side.
I also received an email from Kathy Eyster in Montana. She had recently donated art to a favorite cause and noted: "Half the proceeds from the sale went to the [organization] and half to the artist. In this case I had income from my donation."
First of all, BIG disclaimer here. I am neither a tax lawyer nor accountant, but it sounds like you need to treat that as a sale rather than a donation. Yes? After all, you received income in return. If anyone else has better information, please post in the Comments section below. We need to know!