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  • 1.  Would this be a donation?

    Posted 04-04-2025 08:22 AM

    An artist is interested in auctioning off a piece of his artwork to his class mates. The artist wants the highest bidder who receives the artwork to send the proceeds to us as a donation. Would we consider the artwork a benefit to the donor (highest bidder) and reduce is donation by the FMV? Would it be better for the artist to make the donation after he receives the proceeds?

    Thanks for any insight,

    Therese



    ------------------------------
    Therese Morris
    St. Paul's School
    Concord, NH United States
    tmorris@sps.edu
    ------------------------------


  • 2.  RE: Would this be a donation?

    Posted 04-04-2025 08:53 AM
    There isn't a gift here. The buyer receives something of equal value in exchange for the payment.

    In this case, the only way to create a deductible gift is for the artist to donate the art to you. You can then sell it at a silent auction stipulating a FMV for the artwork. The difference is a deductible gift if the winning bidder pays more than that FMV.

    John

    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987






  • 3.  RE: Would this be a donation?

    Posted 04-04-2025 09:09 AM

    Thank you John.

     

    Therese

     

    Therese M. Morris

    Advancement Data Manager

    St. Paul's School

    P. 603-229-4735

    tmorris@sps.edu

     




    Original Message


  • 4.  RE: Would this be a donation?

    Posted 04-08-2025 10:26 AM

    John,

    It's never over...

    Classmate is an attorney and says, "In order for the purchaser to get the tax benefit (and for artist to avoid taxable income on the price of the painting) the purchaser should make a donation to the school in honor of artist."

    In Case Global Reporting Standards, 1st ed, p 26, 3.1.5: A tangible donor benefit is a payment made partly as a contribution and partly in consideration for goods or services provided by the institution...

    We are not running the auction or sanctioning it. We are not providing the benefit.

    Is there any tax code that prevents this?

    Thanks,

    Therese



    ------------------------------
    Therese Morris
    St. Paul's School
    Concord, NH United States
    tmorris@sps.edu
    ------------------------------

    Original Message


  • 5.  RE: Would this be a donation?

    Posted 04-08-2025 10:38 AM
    It does not matter who provides the benefit. The fact remains that a donor is receiving a benefit in exchange for a contribution.

    Over the years, we have discussed other similar schemes - including one where an alum who owned an electronics store offered a free CD player (obviously many years ago!) to any other alum who provided a copy of a gift receipt from the local college. We went to the IRS with this one and was told what I just told you.

    John

    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987





    Original Message


  • 6.  RE: Would this be a donation?

    Posted 04-08-2025 01:23 PM

    Even older than that: transistor radios!

     

    The IRS reference is Revenue Ruling 67-246, Example 11.

     

    My US$0.02 worth; the usual disclaimers apply.

     

    Good luck!

    Alan

     

    Alan S. Hejnal

    Data Quality Manager

     

    SNAGHTML5cbfa34

     

     




    Original Message


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