Fan art or fanart is unsolicited artwork that is based on a character or property that the artist did not create. It is commonly produced to express enthusiasm and admiration for the original creator and/or creations, and sometimes as a way for young or inexperienced artists to practice and improve their artistic skills.

A stricter definition of "fan art" would include only art inspired by visual media, such as comics or movies, which make use of existing artwork - as opposed to "book illustration", which uses no visual reference but the artist's imagination of characters described by an author. Thus, artwork depictingWolverine from the X-Men (either the comic or the movie) or Orlando Bloom as Legolas would be fan art, while a picture featuring a non-movie-inspiredLegolas would be called a "book illustration". 

Derivative Works. - 173.1. The following derivative works shall also be protected by copyright:

       (a)  Dramatizations, translations, adaptations, abridgments, arrangements, AND OTHER ALTERATIONS OF LITERARY OR  ARTISTIC WORKS;

Making a fan art-based picture therefore constitutes copyright infringement. It is creating a new work based on copyrighted work. The law is clear that such derivative works are protected by copyright, in which copyright belongs to the owner of the original work.

If a person thrives on using materials from the original imagination of others, then that person who created the fan art infringes the moral and economic rights of the original creator, hence illegal.  Creation on the other hand involves hardwork and wisdom , so why would allow others to use the fruits of your ideas and works. The original creator also has a right to profit from their works.