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Cost of Making a Violin


Michael_Molnar
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Michael,

 

You should check with an accountant and possibly with the taxing entities -- the IRS and your state -- as to how to claim the fiddle as a charitable donation. 

 

I doubt that your costs is the way to calculate the amount you are entitled to consider as your donation.  I would assume that the market value of your instrument would determine the size of your donation.

 

I would think you would value your instrument at its market value (ie, what you could sell it for), and claim as a donation whatever the taxing entity allows of that value, perhaps all of it or just part of it.  You probably have some history of the sales of your instruments, and I would imagine that would determine the value of the instrument and the deduction.  After all, your donation was a possible sale which you forwent for the sake of the donation.  I would imagine that you would need the paperwork confirming the value of the instrument, either a history of past sales or an evaluation of your instrument by a professional dealer.

 

I should add that I am no expert in taxes, and offer the above based on what I think is reasonable.  If Sam Z donates an instrument, I would think the value of that donation would be greater than cost of materials.  Similarly, you might be able to make a case that your instrument, in a sale, should be valued at an amount greater than the cost of materials.

 

But check with your accountant to see if "fair market value" in a typical sale is the standard you should use for calculating your donation.

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Not sure if it is useful, but I'm selling mine for 8K and my ball park cost average is: top $75 - 125, back $200-600, FB $50 - 75, fittings /bridge $200-500,  strings $50- $100, neck block and sides $30 - 75.  Varnish / ground / antiquing /polish ....who knows really, my guess is somewhere between 40 and 100 per violin depends on how  I calculate it, but I really don't know.  Never added up true overhead per instrument but since I am on the slow side, it is probally higher then most.  So say around $800 - 1300 in matierial per violin usually.  Not sure how this compares to others.

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I added up the total material cost of making a cello and it was between $1200.00 and $1400.00 with all the wood varnish and set up supplies and special tools like end pin reamers. Strings bridge, tailpiece etc. all more expensive on a cello. 

A nice back, sides, and top would cost more than 1200-1400US.

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A nice back, sides, and top would cost more than 1200-1400US.

 Yeah I know ..whew. I bought a slice of maple I found at a hard wood dealer and resawed it myself. And I resawed the top as well. So I got off easy on the price. So a cello really should be 2000- 2500 - But I think some good wood can be had if you look in the righ places. 

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When an artists donates a painting, I'm pretty sure that they get to claim more than the cost of the canvas, frame, and paint. If this is going to be auctioned, I'm pretty sure that you could claim what they get for it in the auction. If not an auction, I would suspect that the fair market value would be it.

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Hi Michael,

 

I would say unless you have a strict working routine, it 's really difficult to say, I never remember the price of the material.

But what, in my opinion, might be the most difficult thing, is to give a  (monetary ) value to your workmanship.

I always thought it doesn't count so much as my output is so scarce, but if you want to earn money, then it's worth trying to consider that point... :P

 

I know my answer might not help, but that's a good question.

 

Cheers, Dave.

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The main rule of thumb in deducting a donation is the "fair market value" and if under $5000 may not require an appraisal, although above that threshold would require an appraisal.  The IRS publication #561 does not go into the labor involved, but consider this ...  you're not donating your time to the receiving charitable organization, its the instrument you're donating.  The instrument has a fair market value, and there are ways to determine that FMV in the publication.

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 Yeah I know ..whew. I bought a slice of maple I found at a hard wood dealer and resawed it myself. And I resawed the top as well. So I got off easy on the price. So a cello really should be 2000- 2500 - But I think some good wood can be had if you look in the righ places. 

 

The last bit made me laugh because we have a local source of high-quality free poplar.  Ok, so it's a dumpster.  All of the cellos my husband made from this wood sold before they were done (to one of the most legit US dealers, who had them sold before they arrived, and this dealer wants more of the same).   I am convinced the dumpster wood is magic.

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The main rule of thumb in deducting a donation is the "fair market value"...

 

But I think that rule does not apply to a person donating a work that he or she created.  All the creator can deduct is the cost of materials.  Contrary to what Doug said, a painter can only deduct the cost of the canvas, paint, frame, etc.

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Michael, what is your understanding of the amount that you can deduct for a donation? I have the same situation and was having the same discussion with my wife yesterday. I know that the stickler is determining the value of something that one makes. My understanding is that if the item is over $500, you need some sort of appraisal or record of a former sale of an identical item.   

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"Fair market value" is the phrase here, as others have said.  If one has actually sold multiple violins in the, say, $2000 range, than a justifiable fair-market value is $2000. 

 

If one has a price tag stating $2000, but hasn't sold any, than it is hard to say that $2000 is fair-market value.  One could argue the point, and possibly win.  Or lose.

 

I have seen plenty of examples where $500 worth of material has been turned into something completely worthless.  And I'm not implying anything about Michael M's original post here; I haven't seen any of his instruments but he does seem a careful person.  Here, locally, however, I do get to see examples of hand-made instruments that have been donated to schools for, I would suspect, generous deductions on tax returns.  These are almost always total junk and cannot be rehabilitated to anything near playing condition. They absorb the orchestra teachers time as well as mine only to end up in the dumpster.

 

If you're in doubt and want to be sure, get a written appraisal from someone you are not related to.

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Auditor:  "I see you claimed $5000 deduction for your donated violin.  Can you prove Fair Market Value?"

Maker:  "Sure.  See, here's the record of a recent sale for that amount."

Auditor:  "So... where does that sale show up on your income?"

Maker:  "Oops."

 

Great point.

 

But, on the other hand, if you have claimed income for your instrument sales on past tax forms and thus paid taxes on that income, then those instances of selling instruments, declaring the income and paying taxes on them would help you in determining the value of your donation.

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I love all these comments. Don, I do report sales, so I do have an established record for an honest FMV. I only wish I had more sales! So does my wife.  :D 

 

It does look like the material costs are next to nil. Steve, the reason I was interested in the cost of making an instrument is related to the cost of doing business. You have to sell a lot of fiddles to earn a living.

 

Mike

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I love all these comments. Don, I do report sales, so I do have an established record for an honest FMV. I only wish I had more sales! So does my wife.  :D

 

It does look like the material costs are next to nil. Steve, the reason I was interested in the cost of making an instrument is related to the cost of doing business. You have to sell a lot of fiddles to earn a living.

 

Mike

Mike,

True.  to make a living you need to sell a lot of instruments.  This is a topic I get lots of [particularly with students] questions about.

Among the people who share this kind of information with me....An established maker, who only makes new and services their own instruments, will make 10 - 12 instruments a year...a cello counting for 3.  Most professional makers who divide their time with repairs or some other trade related activity will make in the 4 - 6 range.  Serious non-professional are more in the 3-5 range.

So the cost of making...labor not included...is a serious topic for most folks as we need to justify where we invest our violin making budget.  Is it worth buying good wood?  how good?  do I buy varnish and ground or do I make it myself?  Fittings?  What strings...and how many sets will I use before the instrument is ready for the player?

Knowing these costs begs the question:  How do I spend my budget to make the best instrument I am capable of?

on we go,

Joe

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I love all these comments. Don, I do report sales, so I do have an established record for an honest FMV. I only wish I had more sales! So does my wife.  :D

 

It does look like the material costs are next to nil. Steve, the reason I was interested in the cost of making an instrument is related to the cost of doing business. You have to sell a lot of fiddles to earn a living.

 

Mike

Mike,

 

You have a legitimate business with revenue and expenses. 

 

You would definitely want to keep track of your expenses for any given year, including materials and tools purchased, violin making classes attended, books bought, travel expenses, utilities costs, postage and shipping expenses, depreciation on your tools, tax preparation cost (the accountant), legal advice, and the list goes on.

 

I would not think that figuring out the cost to you of making an individual instrument would be helpful in determining your business expenses and thus your taxes on profits (ie, revenue minus expenses).   For any given year, you have a certain amount of revenue (money coming in from sales) and a certain amount of expenses (money you've actually paid out), and your tax burden would be on your profits.

 

You might even have negative profits in violin making in some years, and that might count for you in reducing your taxes from other sources of income besides your violin making.

 

As a former manager of a small business, I would say that figuring out how to itemize expenses and what are legitimate business expenses and figuring out how your violin making related expenses relate to other income sources may well be tasks best left to an accountant.

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