1978 Tax Ct. Memo LEXIS 241 | Tax Ct. | 1978
MEMORANDUM FINDINGS OF FACT AND OPINION
FEATHERSTON,
1. Whether petitioner, a professional artist, is entitled under
2. Whether petitioner is entitled under
FINDINGS OF FACT
Petitioner Joseph Maniscalco (hereinafter petitioner) was a legal resident of Bloomfield Hills, Michigan, when he filed his petition. In his Federal income tax return and his amended income tax return for 1974, he used the cash method of accounting.
During 1974, petitioner was a professional artist. On his Federal income tax return for that year, he claimed an advertising and public relations business expense deduction in the amount of $ 1,214. He attributed $ 1,100 of that amount to the value of three of his plaintings which he donated, apparently, to charitable organizations. On his 1974 income tax return or his returns for prior years, petitioner deducted as a1978 Tax Ct. Memo LEXIS 241">*244 business expense the costs of the materials used to produce the paintings.
In 1974, petitioner painted three portraits and gave one portrait each to the Northwood Institute, the Scarab Club of Detroit, and the Grosse Pointe Symphony. These organizations were exempt from Federal income tax under section 501(c)(3).
On his 1974 Federal income tax return, petitioner claimed charitable contribution deductions of $ 600 for each of the three portraits, or a total of $ 1,800. Petitioner deducted the costs of the materials that he used to produce the paintings on his 1974 Federal income tax return or his returns for prior years.
Respondent determined that petitioner was not entitled to a deduction for either the alleged $ 1,100 advertising and public relations business expense or the claimed $ 1,800 charitable contribution.
OPINION
The Internal Revenue Code provides no ground for allowing either the alleged business expense deduction or the charitable deduction petitioner claims. As to the former,
Petitioner produced the contributed paintings through his own labor. He did not realize taxable income when he completed them. Nor did his labor in doing the paintings constitute the payment of a deductible business expense. We find no ground for holding that
As to the claimed contributions, the Tax Reform Act of 1969 amended
(e) Certain Contributions of Ordinary Income and Capital Gain Property.--
(1) General rule.--The amount of any charitable contribution of property otherwise taken into account under this section shall be reduced by the1978 Tax Ct. Memo LEXIS 241">*246 sum of--
(A) The amount of gain which would not have been long-term capital gain if the property contributed had been sold by the taxpayer at its fair market value (determined at the time of such contribution), * * *
* * *
Included in the class of property subject to this provision are works "of art created by the donor."
Petitioner recognizes that
1978 Tax Ct. Memo LEXIS 241">*247 While petitioner may be correct that, in a given case, the combined estate tax and income tax on the sale of a deceased artist's works of art may exceed their value, that possibility is not involved in this case. The issue here is the allowability of a deduction, and deductions are matters of legislative grace.
Nor do we find
Petitioner makes an eloquent plea on behalf of his fellow artists who, he feels, are being asked to carry an unfair tax burden, but he addresses*249 his plea to the wrong forum. This Court does not write the tax laws. It merely applies the laws as written by the Congress. While it is true that the Court will, and should, examine the constitutionality of such laws, we do not think Congress exceeded its constitutional authority to prescribe the rules for applying the income tax in adopting
To reflect the foregoing,
Footnotes
1.
/↩ All section references are to the Internal Revenue Code of 1954, as in effect during the tax year in issue, unless otherwise noted.2.
/ SEC. 1023 . CARRYOVER BASIS FOR CERTAIN PROPERTY ACQUIRED FROM A DECEDENT DYING AFTER DECEMBER 31, 1976.(a) General Rule.--
(1) Carryover basis.--Except as otherwise provided in this section, the basis of carryover basis property acquired from a decedent dying after December 31, 1976, in the hands of the person so acquiring it shall be the adjusted basis of the property immediately before the death of the decedent, further adjusted as provided in this section.↩