Giving a gift twice

It is, and presumably the taxpayer took advantage of that provision at the time of the initial donation, regardless of how much he paid for it when he acquired it.

My point was that now he has the painting back in his hands and has expended no cash on top of what he spent when he bought it. To get yet another deduction on top of the first just doesn't seem right.

Harlan's just an agitator even when he is sober.

Click and Clack (the NPR car talk guys) run that show to advertise their auto business and their website Cars.com. So they'd probably send you a reciept from their dealership and have it signed by their accountant U. Ben Had. ;)

And then again the IRS would almost certainly bounce you to the top of the audit list since the receipt would exceed blue book.

Dick

Suddenly you speak Dutch?

maybe I'll ask them next summer at the Van Gogh museum when we visit Amsterdam.

ChEAr$, Harlan

Okay, not a Matisse, but a Rodin... sculpture.

Now them's fighting words! You OWE me, Dick.

ChEAr$, Harlan

With the Matisse, you could argue you that your income was in excess of the FMV of the Van Gogh you previously deducted. With the Rodin, you have straight income.

This is not the first time a Cubs fan has wanted a fight with me. But I have no reason to fear the minions of the Wrigley Graveyard for like their team then have lost their last eight post-season forays.

Get uppity with me and I'll start a rumor that you drink blended Scotch. ;)

Dick

But there was no such clause. The donor didn't expect it to be returned (and, in the cases described, the donor certainly didn't expect it to be returned; his heirs acted).

Since the museum has no obligation to return it to him, why wouldn't it be considered a gift?

Seth

With no 2004 deduction? That could be painful (underpayment of taxes plus 3-4 years of interest and penalties).

Besides, he _did_ donate it in 2004.

Seth

So? Suppose the museum sold it for FMV (say, $7K at the time), his mother bought it, and gave it to him (under the $13K gift limit, so no problems there). He's still have it back in his hands.

And at no expended cash (this time around) either.

Since when has "seems right" had anything to do with taxes?

Seth

No, but his mother did, and his basis is the same as hers: $7,000. You might want to check out the guidelines for valuing donations in Pub 526.

It all depends on the increase in FMV since it was donated. All the OP said was the painting was appraised at over $5,000. After all the discussion, I would hope it was close to $30,000.

My position is the OP has income to the extent of his

Plus I see no penalties because it was a legitimate deduction in 2004.

I just do not believe a 501(c)3 can gift its assets to private individuals so he has income in the year of return and not much time to tax plan.

Dick

Upon audit. Keep in mind that "doesn't seem right" is more than adequate grounds for an auditor to disallow a deduction.

Dick

If that is the case, the painting still belongs to the 501(c)3, and is held by the individual as constructive trustee. That being the case, the individual does not own it, and thus has no income.

"Gil Faver" museum to the initial donor. If I donate money to a charitable

Nonprofits are not allowed to make "gifts" but can make distributions to the extent that they are within their exempt purpose. Normally the exempt purpose of a museum is not to help the destitute, so it would be improper for them to do that.

Stu

If you insert language in a nonprofit's bylaws that says that its exempt purpose includes, "to make distributions that would otherwise be nonqualified, but will add to the organization's good will" the IRS would deny tax exempt status - right after they stop laughing.

Yup. Or disposes them pursuant to its exempt purpose. That's the law.

That bears repeating.

Stu

Normally, yes. But if the gift were structured as a charitable lead trust it could be done. And the donor would get a deduction for the fraction of the value of the artwork that represented the actuarial value for the time the nonprofit would have it.

A museum is not allowed to do that. At least, a nonprofit museum is not allowed to.

Because it's not allowed to make such a gift.

Stu

I'm pretty sure the "smell test" is authorized in the regulations.

Stu

If you read the NY Times you'd already know the answer. ;-)

Stu

I am not suggesting the museum was helping the destitute. I was suggesting, as you are (apparently) that it is ok for the museum, under limited circumstances, to return the painting to the donor, if it is in their charter/bylaws, etc. and fills a legitimate purpose. And, if so, I believe this distribution does not constitute income to the recipient. Another poster indicated that the recipient's basis in the painting is now zero, so he would have no charitable deduction if he gave it away again.

Would that be Line 21 Other Income?