Jim and the rest of the list,
This issue gets raised periodically over the years, and I don't think
anything official (i.e., new IRS rule or new tax law) has been
established along these lines, or we surely would have heard of it!
Two sources of information might be relevant to the discussion: the
first is in the regulations implementing the Archaeological Resources
Protection Act of 1979 (43 CFR 7), where monetary values are
associated with archaeological sites for purposes of determining
amount of penalties for violations. The second is from a draft
technical brief prepared in the mid-1980s by Yvonne G. Stewart of the
National Park Service, entitled "Tax Treatment of Archeological
Sites," in which artifact donations are discussed.
"46 CFR 7.7.14 Determination of archaeological or commercial value
and cost of restoration and repair.
"(a) Archaeological value. For purposes of this part,the
archaeological value of any archaeological resource involved in a
violation of the prohibitions in s. 7.4 of this part or conditions of
a permit issued pursuant to this part shall be the value of the
information associated with the archaeological resource. This value
shall be appraised in terms of the costs of the retrieval of the
scientific information which would have been obtainable prior to the
violation. These costs may include, but need not be limited to, the
cost of preparing a research design, conducting field work, carrying
out laboratory analysis, and preparing reports as would be necessary
to realize the information potential.
"(b) Commercial value. For purposes of this part, the commercial
value of any archaeological resource involved in a violation of the
prohibitions in s 7.4 of this part or conditions of a permit issued
pursuant to this part shall be its fair market value. Where the
violation has resulted in damage to the archaeological resource, the
fair market value should be determined using the condition of the
archaeological resource prior to the violation, to the extent that its
prior condition can be ascertained.
"(c) Cost of restoration and repair. For purposes of this part, the
cost of restoration and repair of archaeological resources damaged as
a result of a violation of prohibitions or conditions pursuant to this
part, shall be the sum of the costs already incurred for emergency
restoration or repair work, plus those costs projected to be necessary
to complete restoration and repair,...[8 examples of activities
listed]." A complete version of 43 CFR 7 can be accessed on the Web
at http://www.access.gpo.gov/nara//cfr/cfr-table-search.html
The 1986 draft technical brief states (page 8):
"While artifacts are not discussed in any of the tax statutes [in
force in 1986], their analysis and comparison may be the most
significant result of excavation, testing or survey. Artifacts
recovered from private property belong to the property owner, even
when excavated with public funds, but may be donated by the private
property owner to a local, state, or Federal conservation facility or
to a qualified non-profit conservation facility.
"Such a donation may be considered a charitable contribution by the
IRS. However, since archeologists hsitate to develop a system of
artifact valuation out of concern that an antiquities market would
develop, and since IRS will not accept an unsupported value in a
charitable contribution deduction, a Catch-22 situation has emerged.
"The approach used at the Averbusch Site in Tennessee has been
suggested by several authors (Gyrisco 1980, Teidt 1982), and, we
believe, is being used or discussed by the archeological community as
the solution to the problem. As commonly heard or read, the donor
simply takes a deduction equal to the cost of excavation of the
artifacts donated. However, taking this deduction is a big risk for
the property owner, whether a developer or a private person. If
audited, this type of donation will not be allowed and the donor will
have to pay back taxes plus interest. At the May, 1985 meeting between
IRS and NPS, NPS was told that deduction of this type would definitely
never be allowed. This method conflicts with previously accepted
universal valuation principles. Artifacts must be valued in exactly
the same manner as antiques or museum properties are valued. Of
course, this is specifically the type of valuation that archeologists
fear because it could increase traffic in illegal artifacts, and
because the donation of research collections, many of which have no
real monetary value, may cease to be attractive to potential donors."
[citations: Geoffrey Gyrisco, 1980, "Legal Tools to Preserve
Archeological Sites." 11593 Special Issue, Fall, Heritage
Conservation and Recreation Service, Washington, D.C. (this newsletter
is out of print); Glenn F. Teidt, 1982, "Easements and Artifacts: An
Archeological Investigation of the Internal Revenue Code." American
Antiquity 47(2):376-381]
I would be interested hearing about additional information you receive
from your inquiry.
Sue Henry Renaud
______________________________ Reply Separator _________________________________
Subject: Tax benefits to Collections Donation
Author: "James G. Gibb" <[log in to unmask]> at NP--INTERNET
Date: 12/18/97 4:29 PM
I would like to speak with anyone who has been involved in an IRS
appeal, or has received a letter opinion from the IRS, regarding the
valuation of scientifically recovered, donated artifact assemblages. I
am looking for precedents to present to the IRS to support declared
deductions from those property owners who donate materials to Anne
Arundel County, Maryland, USA.
Private responses can be directed to me at [log in to unmask], but I think
this issue is sufficiently important to warrant sharing non-priviledged
information with the list. I will cross post to ARCH-L. Thanks in
advance for your responses.
Jim Gibb
The Lost Towns of Anne Arundel Project
Annapolis, MD USA
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