I beg to differ with Charles' advice regarding the measure of an income tax deduction for donating a photograph to the Chamber of Commerce.

Although the charitable deduction for contributions of property is generally measured by the fair market value of the property, the deduction for ordinary income property is limited to the taxpayer's basis in the property.

See Internal Revenue Regulations:

IRC Reg. § 1.170A–4 Reduction in amount of charitable contributions of certain appreciated property.

(a) Amount of reduction. Section 170(e)(1) requires that the amount of the charitable contribution which would be taken into account under section 170(a) ... In the case of a contribution by an individual or by a corporation of ordinary income property, as defined in paragraph (b)(1) of this section, by the amount of gain (hereinafter in this section referred to as ordinary income) which would have been recognized as gain which is not long-term capital gain if the property had been sold by the donor at its fair market value at the time of its contribution to the charitable organization, ...

(b) Definitions and other rules. For purposes of this section: (1) Ordinary income property. The term ordinary income property means property any portion of the gain on which would not have been long term capital gain if the property had been sold by the donor at its fair market value at the time of its contribution to the charitable organization. Such term includes, for example, property held by the donor primarily for sale to customers in the ordinary course of his trade or business, a work of art created by the donor,...

Also, the Pension Protection Act of 2006 greatly increased the substantiation requirements for charitable contributions.

Cheers!
Sunseeker

I agree with RVDude, intent matters. (RVDude said, "declare your reason", the Internal Revenue Code and associated cases refer to intent) Howard began the query by stating that the COC was interested in buying photos that he had taken ("our photos"), not that the COC would be commissioning him to take photos. That is his stated intent at the time of the transaction, selling existing property. As I have told many law students, "yes, the words really matter".

I agree that a "real cost of doing business" experienced by someone who is in the business of selling photographs results in a legitimate business expense, that may be offset by other revenue in the same business ( a business deduction from gross income). However the real cost of doing business is the actual cost of doing business, not some phantom value ascribed by the taxpayer. Charles wrote and I responded to: "The value for write off can be determined, within reason, by yourself. Had they retained someone to create the image, it is reasonable that a photographer might well have to travel, time the event for specific lighting and even possibly for the availability of wildlife, etc. All of this adds to the value you would establish. Sending them an invoice showing the amount and a statement donated to the COC is sufficient as a legitimate record of your donation." This is simply not correct.

Hypothetically, if Howard is in the business of selling photos, which might be an extension of his website business, then mathematically the income tax result of a legitimate business expense resulting in a tax deduction from the gross income of the business or a charitable deduction is the same, i.e. the basis in a self-produced item would equal the actual cost of doing business related to that item. In either case, there is no deduction for the value of the individual’s labor. (This analysis does not address depreciation which is merely a timing issue. Given Howard has already told us that his camera is a business expense of, I think, his web-business, presumably deducted under Section 179, there is no further depreciation deduction available.)

By the way, I am a tax attorney. However once I tell you that, [yes, this is an actual requirement] pursuant to U.S. Treasury Department Circular 230, I am required to inform you that any federal tax advice contained in this communication was not intended or written to be used for the purpose of avoiding tax penalties imposed under federal law. To obtain penalty protection, the new Regulations require attorneys, accountants and other tax advisors to perform increased due diligence to verify all relevant facts and to format the written tax advice in a lengthy number of separately enumerated sections with numerous disclosures.

Cheers Two!

Sunseeker