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Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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can i file for income tax averaging?

Resolved Question:

can i file for income tax averaging?
Submitted: 6 years ago.
Category: Tax
Expert:  Merlo replied 6 years ago.

Hello JA Customer,


Years ago, the IRS used to allow all taxpayers to use the Income Averaging tool for spreading out their income over several years. However that was done away with years ago and is now only available for taxpayers who are in the fishing or farming trades, due to the cyclical nature of their business and income.


Income averaging is no longer available to use unless you are in the farming or fishing trades.



Thank you JA Customer



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Customer: replied 6 years ago.

I have a lot of original art work, i want to donate it to the utah art museum. How do i place a realistic value on the art?


Expert:  Merlo replied 6 years ago.

Hello again JA Customer,


IRS Publication 561 provides the following rules for putting a value on paintings, antiques and other objects of art and states the following:


Your deduction for contributions of paintings, antiques, and other objects of art, should be supported by a written appraisal from a qualified and reputable source, unless the deduction is $5,000 or less.


Art valued at $20,000 or more. If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the signed appraisal to your return. For individual objects valued at $20,000 or more, a photograph of a size and quality fully showing the object, preferably an 8 x 10 inch color photograph or a color transparency no smaller than 4 x 5 inches, must be provided upon request.


More weight will usually be given to an appraisal prepared by an individual specializing in the kind and price range of the art being appraised. Certain art dealers or appraisers specialize, for example, in old masters, modern art, bronze sculpture, etc. Their opinions on the authenticity and desirability of such art would usually be given more weight than the opinions of more generalized art dealers or appraisers. They can report more recent comparable sales to support their opinion.


To identify and locate experts on unique, specialized items or collections, you may wish to use the current Official Museum Directory of the American Association of Museums. It lists museums both by state and by category. You might also check with the museum that you plan to donate this artwork to, and see if they have a qualified appraiser on staff that can provide these appraisals for you.


If the total amount you would be claiming for the value of this artwork is $5,000 or less, then you could also use the method of comparable property sales to value the artwork. This would entail finding similar art work that is for sale by the same artist or an artist with a similar background and reputation. Using an appraiser is still recommended as in the event of an audit this would hold more weight, but you could use this method if the entire value of the collection is less than $5,000.



Thank you JA Customer



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