Saturday, February 20, 2010

Tax Deductions for Artwork

I can only assume that the reason no one has bid on our priceless artwork is because you feel that your house is too modest to be burdened by such a magnificent and groundbreaking wall hanging. However, this is not a real loss for us, because we can still make a significant amount of money off this piece of art even if no one buys it.

How? By getting a tax deduction of course. You see, anything you donate to a registered non-profit organization in the U.S. is tax deductible. That means that if you donate some old clothes to the local Salvation Army, you can write it off in your taxes. The downside is that old clothes aren't worth much, so your tax writeoff will be like five dollars. 

The key is to donate something extremely valuable. This is where priceless artwork comes in. 

How to get a high tax deduction for a junky piece of art
1. Create some sort of artwork. It does not have to be good.
2. Offer to sell it to your friends
3. Convince a few of them to bid the price up to an extremely high price, like 80 dollars (some art goes for multi millions of dollars, so really, there is not much of a limit)
4. Do not actually sell it to them. They are bidding the price up artificially high, knowing that they will not actually have to buy it at that price.
5. After the price has been bid up really high, donate the art to some kind of charity
6. Tell the charity that the art is worth whatever amount your friends bid it up to. I doubt they will ask many questions about this.
7. Get a receipt from the charity
8. Write off this amount in your taxes the following year*
9. Wait for the IRS to approve your gigantic tax refund. I imagine they will approve it immediately, and send you a nice card thanking you for your generosity towards the charity. The IRS is very friendly, and always approves everything.
10. Collect your enormous tax refund

*This idea is actually more illegal than most of our other ones, to the point that we feel it is necessary to point out that you should not actually do it. It is called tax fraud. Even though Al Capone probably killed like 1000 people in the 1920s and 1930s, the thing that finally got him in trouble was tax fraud. The FBI may not notice if you kill a bunch of gangsters in Chicago, but if you do something shady with your taxes, they will always find out.

Alternative idea:  if you do not want to be on the bad side of the IRS change step 5 in the above business plan to read "5. After the price has been bid up really high, demand the highest bidder pay the full bid price."  Friends forget and forgive... the IRS does not!

1 comment:

  1. This idea also doesn't do you any good if you take the standard deduction, like if you're not a homeowner and your other deductions don't add up to 5700 per year (11,400 if married).


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