502AC: Maryland Subtraction for Contribution of Artwork (2024)
Maryland · Comptroller of Maryland · Used for tax years 2024
Maryland Form 502AC calculates the Maryland income subtraction for a qualifying donation of your own artwork to a Maryland museum. It records income used to determine qualification, museum acceptance, and the artwork’s appraised value and subtraction amount, and is attached to Fo
Who files this form
Use Form 502AC to claim the Maryland subtraction for donating your own artwork to a Maryland museum. You qualify if:
- At least 50% of your income for the current year or the prior year comes from selling your own artwork.
- The museum is located in Maryland, is open to the general public, and accepts your artwork.
For a joint Maryland return, the subtraction can reduce only the qualifying artist’s taxable income. Remove any spouse’s income included in the figures entered on lines 1 and 4, and attach a schedule showing the adjustment.
What you'll need
Attach these items to your Maryland return:
- A completed Form 502AC.
- A certified appraisal verifying the artwork’s fair market value, prepared by an independent appraiser.
- Written acceptance of the artwork from the museum.
- If applicable, a schedule showing the removal of your spouse’s income from lines 1 and 4.
You will also need income figures for Part A, the museum’s name and address, and any amounts attributable to the donated artwork included in your federal or state itemized deductions.
How to file
- Print using blue or black ink only. Enter your identifying information and check whether you are filing Form 502 as a resident or Form 505 as a nonresident.
- Complete Part A to determine whether you meet the income requirement. The instructions say to go to Part B if line 2 is less than line 3; otherwise, complete lines 4 through 6.
- Complete Part B with the museum’s name, address, and answers to questions 7 through 9.
- If you qualify, complete Part C. Enter the appraised fair market value on line 10, enter the applicable deduction amounts on line 11, and subtract line 11 from line 10. Copy line 2 to line 13, then enter the lesser of lines 12 and 13 on line 14.
- Include the line 14 amount on line m of Form 502SU or Form 505SU. Attach Form 502AC and the required supporting documents to Form 502 or Form 505.
The supplied text does not provide a mailing address or e-filing instructions.
Common mistakes
- Claiming the subtraction when both line 2 exceeds line 3 and line 5 exceeds line 6. The form says you do not qualify in that situation.
- Claiming the subtraction when any answer in Part B is “No.” All three museum requirements must be met.
- Leaving out the independent appraisal or the museum’s written acceptance. Both are required attachments.
- Including a spouse’s income in lines 1 and 4 on a joint return. Remove that income and attach an adjustment schedule.
- Failing to reduce the artwork’s value by the applicable deduction amounts on line 11.
- Claiming more than the allowed amount. Line 14 must be the lesser of line 12 or line 13.
Questions people ask
Can I qualify based on last year’s artwork sales?
Yes. The qualifying guidelines allow you to meet the 50% income requirement in either the current year or the prior year.
Does any museum qualify?
No. The museum must be located in Maryland, be open to the general public, and accept your donated artwork.
Can I claim the full appraised value?
Not necessarily. Part C reduces the appraised value by applicable deduction amounts entered on line 11. Your subtraction is then limited to the lesser of that remaining value or the amount from Part A, line 2.
Where do I report the subtraction?
Report the amount from Form 502AC, line 14, on line m of Form 502SU or Form 505SU. Attach Form 502AC to your Maryland return.