What are the tax rules about donating personal papers and artwork created by the donor?

Personal papers and other creative works by the donor were excluded as tax-deductible materials by the Tax Reform Act of 1969.

The Society of American Archivists publication, "Archives and Manuscripts: Law" (Peterson & Peterson, 1985), describes the legal issues that were current as of that date:

Often the reason a donor chooses to deposit rather than donate, especially if a donor is a private individual not an institution, is the tax implication of the gift. The problem arises from the Tax Reform Act of 1969, particularly sections 201(a) and 514. At one time persons could donate the papers they had created to an archives and take a tax deduction for the appraised value of the papers. The reform act changed all that. [...]

Under the current law, the allowance of a deduction for the donation of personal papers depends upon several factors: (1) the nature of the receiving institution, (2) the nature of the property donated, and (3) whether the donor can "establish a basis" in the property to be donated. To be a tax deductible contribution for an individual, the donated property must be a "capital asset" for the donor. Normally, for the creator of the papers, they cannot be a capital asset. [...]

The tax law is very clear about capital assets and personal papers. Specifically excluded from the definition of a capital asset are: a copyright, a literary, musical, or artistic composition, a letter or memorandum, or similar property, held by -

(A) a taxpayer whose personal efforts created such property,

(B) in the case of a letter, memorandum, or similar property, a taxpayer for whom such property was prepared or produced, or

(C) a taxpayer in whose hands the basis of such property is determined, for purposes of determining gain from a sale or exchange, in whole or part by reference to the basis of such property in the hands of a taxpayer described in subparagraph (A) or (B).

Consequently, donations from a person described in category A, B, or C cannot be capital assets.

Since that time, multiple bills have come up to address this issue and make it possible for donors to take tax deductions on personal papers, but so far, none have been successful.

The last notable one was The Charity Aid, Recovery and Empowerment (CARE) Act, which died around 2005.

This is why many archives put a disclaimer on their websites notifying donors that their personal papers will not be deductible. (Although other papers, such as manuscripts created by third parties, ARE deductible.) See for example:

Stanford's archives web site, under "What are the financial implications of a donation?" http://lib.stanford.edu/node/10924/og-panel/6

Columbia's archives web site, under "Monetary Appraisals for Tax Deductions" http://library.columbia.edu/indiv/burke/archives/awts/donate.html

Additional information about the law can be found in the Society of American Archivists publication, http://www2.archivists.org/sites/all/files/Archives&Mss-Law.pdf , pages 35-37.