Someone who buys a work of art can donate to a charitable org-
anization and receive tax benefit for its full value, but not
the maker. There are ways around this, like setting up a
"collection" of your own work legally and the “collection” is
then the “owner” and can make the donation and get the credit,
Ownership of work can be transferred to a partner using legal
means. (Check this out for recent changes. )

A way to certify the existence of a work is to photograph it and mail
it as a postcard to yourself, so that the postmark gives legal proof
of copyright. There are other wars as well to accomplish this.

Forward averaging - is useful for some artists (writers) but not worth
the trouble for most crafts people. [t involves spreading out
earnings over several years to offset fluctuations in profits
and losses. It requires legal accounting advice and usually
large payments up front to Revenue Canada. Hopefully tax reform
will reduce the need for forward averaging.

Losses deducted from other sources of ineome - is currently not
permitted. For instance income from teaching pottery cannot be
used to augment losses in pottery production and be recognized
as a Viable deduction.

The above concerns were in advance of the latest budget/taxation report.
Updated information can be obtained from Revenue Canada Taxation. Pat
Carney's of fice in Vancouver. or the Potters Guild library.

Charitable Tax Status

In order to have this designation. an organization has to be in business
for the “benefit of the public”. In the case of the Potters Guild,
4 separate "charitable" organization can be set up which falls into
this category. i.e. would give workshops. tours, ete. The Guild Gallery
could then donate its profits to the “charitable organization of the
Potters Guild" and claim it as a deduction, Charities are either:
a "foundation" that gives money away: or an “organization” that does
charitable things.

In order to get charitable tax status, some criteria must be met: ie:

- mot allowed to engage in political activity (not defined) or support
a political party. but can lobby or complain to government:

= must submit the bylaws of the organization and minutes of board
meetings.

Donations to charitable organizations by corporations is less rewarding
now tax wise. and many prefer to support by advertising or sponsorships
which can be claimed as business promotion expenses.

Professionals ¢in “business") who join the Potters Guild can claim
their fees and any donations if the Potters Guild has charitable tax

status.

An informative beok on this subject is “Tax Guide for Charities" from
Cooper's & Lebrand'’s. 1111 West Hastings, Vancowver (604-661-5700).

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