Legal Question in Business Law in Virginia

Silent Auction

My company is a for profit company. We would like, however, to conduct silent auction of original art at an upcoming event in Virginia. 100% of the proceeds are to be passed on to a select non-profit charity in the form of a monetary donation. Are there any legal requirements I should be aware of or anything that would prevent me from doing this? Please note that it is to be a silent auction with the artwork going to the highest bidder. As a for profit company, we already know that we cannot conduct a raffle. Thank you!


Asked on 10/01/03, 1:04 pm

2 Answers from Attorneys
Steven Martinek Steven Martinek Lawyer Ltd.

Re: Silent Auction

I am not licensed to practice in Virginia. It occurs to me that it may be wiser to have the artwork appraised at the highest defensible value, then gift it to the non-profit and have the non-profit nominate your company as agent to conduct the proposed auction.

This would protect the value of your charitable deduction even if the artwork failed to yield the appraised value. It would be best to consult with Virginia counsel. Steve

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Answered on 10/01/03, 3:11 pm
David Weilbacher, Esq. Attorney at Law

Re: Silent Auction

If your company auctions the art work, it will generate a gain that it must pay taxes on. Therefore, it would be best to donate the piece to the non-profit first, and allow them to submit it to to auction. Have the piece appraised first. You can deduct the fair market value of the piece. If you have any questions, give me a call. 216.241.2500

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Answered on 10/02/03, 7:25 pm


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