Gifts of artwork: Worth a look, but be careful

by SCF Team | August 1, 2025 | Siouxland Community Foundation Blog, Advisor Resources |

With art ownership rising among younger high-net-worth clients, it’s increasingly important to understand the nuances of charitable gifts of artwork.

Direct Donation for Related Use

If art held for more than a year is donated directly to a museum or institution that uses it in its mission, the deduction can be based on fair market value. Strict IRS rules apply, including appraisals and potential clawbacks if the art is sold within three years. More information is available in the IRS guidance on charitable contributions of property.

Donation for Sale by a Charity

If the artwork is donated to a charity to be sold, the deduction is limited to the lesser of fair market value or cost basis. While less generous, this route allows flexibility and can include contributions through donor-advised funds. IRS rules, including Form 8283 requirements, still apply.

As with any gift of hard-to-value assets, the best approach for donating artwork is highly dependent on the individual client’s art collection, tax situation, and charitable goals. The community foundation team is always happy to serve as a sounding board for charitable gifts of all kinds. Reach out any time. We are always here for you!