Tax deduction for purchasing Canadian works of art
Good news: purchasing Canadian works of art at Richard Johnson Gallery could allow you to claim a tax deduction! Simon Gareau, Lawyer, D.E.S.S. Fisc. Senior Manager at Raymond Chabot Grant Thornton gives us answers about it in his instructive Works of Art and Taxes article.
As a matter of fact, we can read that: "Whether they are individuals, partnerships, corporations or trusts, taxpayers who acquire an eligible work of art can claim an annual capital cost allowance equal to 20% of the amount paid for federal purposes and 33 1/3% of the amount paid for Quebec purposes."
Amongst eligible works of art, the Lawyer mentions: "Prints, etchings, drawings, paintings and other similar works of art whose cost is not less than $200.
This is our good news for the reason that our Limited Edition Archival Photographs are prints! [+] Read the complete list of eligible works of art.
However, certain conditions apply, as we can read in Gareau's article:
- "The work of art must have been created by an artist who was a Canadian citizen or permanent resident at the time it was created;"
- "The work of art must have been acquired from a person with whom the purchaser was dealing at arm’s length;"
- "The work of art must have been acquired solely for the purpose of generating business income, for example, to decorate the reception area, a conference room, hallway or a shareholder’s office, and be visible to the enterprise’s clients."
What if you sell or donate your works of art in the future? [+] Find more answers here.
// This blog post is general information and cannot be considered as a legal advice. We invite you to discuss your situation with a professional.