Artwork as a Tax Write Off

By Mike Broemmel

Artwork is a wonderful addition to any space. This includes business and workplace locations. Beyond enhancing almost any type of decor, in some instances artwork can be a viable and profitable investment. If you are contemplating buying artwork, you might wonder whether you might qualify for a tax write off. There are some limited instances in which the purchase of artwork can qualify you for a tax write off.

Artwork as a Business Deduction

If you own a business that requires a professional and attractive office environment, you might be able to purchase artwork and use the cost as a tax deduction or write off. The purchase of equipment, furniture and related items for your office or workplace are expenditures that qualify for a tax deduction.

Some work spaces are such that the addition of artwork will be considered a legitimate business expense. For example, offices of a professional such as an attorney, accountant or consultant is an environment that legitimately requires at least some sort of artwork on the premises.

Pay attention to the amount of money spent on artwork that is intended to be used as a tax write off. Although there is no specific monetary standard, don't go overboard. A typical business owner cannot spend large amounts of money on artwork for the workplace and expect to be able to take advantage of a comparable tax write off.

Tax Write Offs When Buying and Selling Artwork

There are instances in which a person who buys or sells artwork can take advantage of certain tax deductions and write offs. The most commonly used write off related to artwork involves a deduction when a person sells a piece of art that has dropped in value since the initial purchase. The seller will qualify for a tax deduction or write off based on the different in value of the artwork.

Interior Design, Artwork and Tax Write Offs

If you are involved in interior design and you purchase artwork with the idea of using it on behalf of a client, that purchase normally will be considered a legitimate business expense. Therefore, you likely will be able to write off or deduct the cost of such artwork from your profits.

Keep in mind that when you use the artwork in a decorating project, or when you sell the artwork to a client, any money you earn for that sale above and beyond what you paid for the artwork originally will be considered income for your business.

Considerations

Although there are ways in which artwork can be used as a means to obtain a tax write off or deduction, the primary focus of purchasing, selling or trading in art cannot be tax-related.

There are ways in which purchasing, holding and ultimately selling art can be a solid investment plan. However, in the vast majority of cases, any significant tax write off associated with art ownership is not an essential element of that type of investment.

Warning

Dealing with the propriety or using artwork as a tax write off is a complicated issue. Therefore, the typical taxpayer is best served by engaging the services of a qualified, experienced tax professional who deals with issues pertaining to the investment in artwork, including the ability to use that investment as a tax deduction.

About the Author

Mike Broemmel began writing in 1982. He is an author/lecturer with two novels on the market internationally, "The Shadow Cast" and "The Miller Moth." Broemmel served on the staff of the White House Office of Media Relations. He holds a Bachelor of Arts in journalism and political science from Benedictine College and a Juris Doctorate from Washburn University. He also attended Brunel University, London.