Guerrilla Warfare: Turning a client's $25K into over $625K with Peter Max

Here's a little-known fact about the IRS and art. If you hold a piece of artwork for one year and then give it away to a non-profit (like a library or a museum), you can deduct the appraised value of that art as a donation on your 1040 income tax form. Back about 1979, my literary agent also worked with famous artist Peter Max, and I came up with an idea.

My client needed a gift for 250 salespeople at their million-dollar club event. We paid Peter Max $25,000 to create an original piece of art for my client, along with 250 signed and numbered prints of that art. The client got the origiinal to hang in their lobby, and the salespeople each got a print. Later that year, I had an art appraiser issue certificates that each print was worth $2500, and encouraged the sales people donate their print to a non-profit one year and one day after they got their prints, and to take the $2500 tax deduction. That amounted to $625,000 in deductions. In addition, the original art appraised at quite a bit more, and the client home office took a gigantic donation deduction.

Now a caveat for you artists. The artist himself cannot donate his or her work and have the same kind of tax treatment. But if you know an up-and-coming artist and need a gift for your salesforce, you can win on multiple fronts:

1. You can put some serious food on the artist's table.
2. You can give your salesforce a gift for which you pay $100, but which your giftee can use to obtain a much larger tax deduction the following year.

Win-win, eh?

Oh, yeah. This went over so well that the client did another Peter Max deal for the following year.

BTW, notice my watch. It was an HP-1 calculator watch. Quite an advanced piece of technology in 1979.

#guerrillawarfare #petermax #artforfunandprofit