The prices fetched by famous artworks continue to astound industry-watchers. In spring 2012, Edvard Munch’s The Scream set the record for a work sold at auction—$120 million. Sales of contemporary and modern art have also been setting records. As the value of famous works climb, many collectors are motivated to warehouse their collections while they appreciate in value. The location of the chosen warehouse can also help reduce the taxes owed on such collections.Continue Reading...
- Untitled by Michael Goldberg, 1986 Oil and pastel on paper 29.25 x 27.75 inches
- Spannocchia – NY XV by Michael Goldberg, 1986 Oil on canvas 79 x 79 inches
- Spannocchia – NY IV by Michael Goldberg , 1986 Oil on canvas 86.5 x 85.5 inches
- Untitled by Michael Goldberg, 1951-2 Oil on canvas 57 x 50.25 inches
Collection of University Art Museum, CSULB. Gift of the Gordon F. Hampton Foundation, through Wesley G. Hampton, Roger K. Hampton, and Katharine H. Shenk
An artistic work’s beauty may be in the eye of the beholder, but its valuation for taxation purposes is in the eye of the Internal Revenue Service. Recently, one of Robert Rauschenberg’s works captured attention for an uncommon tax and art valuation imbroglio surrounding the combine, Canyon. The IRS claims the work is worth $65 million and that the owners of the work owe $40 million in estate taxes for the work, despite having received three expert appraisals that held the work to be valueless.Continue Reading...
The recent troubles of Knoedler Gallery, now airing in the press and later, presumably, in the courtroom, may shed some light on certain art world concerns – due diligence, gallery sale practices, sophisticated fakes/forgeries, and problems with authenticity in the market. This piece discusses the importance of carefully managing the business of artistic production. These considerations include strict inventory lists, transaction history, image and information database management, responsible studio control, and good artistic practices in general.Continue Reading...
Attention shifts to Los Angeles this Fall, thanks to Pacific Standard Time, a stunning tribute to the Los Angeles post-war art scene. Pacific Standard Time (PST), spearheaded by the Getty Trust, presents simultaneous exhibitions and events at more than 60 Southland cultural institutions. PST provides an ideal opportunity for a closer look at practical business and legal considerations that preserve and shape an artist’s legacy.
Ars longs, vita brevis. Art is immortal, artists are mortal. Taxes impinge on every part of the art world and are a concern for both artists and collectors. Planning for and administering estates of artists and owners of art collections raises unique business management, income tax, transfer tax, and estate planning issues. Such planning often requires an interdisciplinary approach that addresses copyright law, tax and estate planning (including, but not limited to, charitable giving), business management, and knowledge of the valuation of a creative work. Substantial changes were made to the Federal estate, gift and generation-skipping transfer taxes by The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the "2010 Act").
Museum collections have long tantalized would-be buyers and dealers of fine art. With most museums displaying a third or less of their collections at any given time - before it moved into its new building in 2004, the Museum of Modern Art was able to display only 10 percent of its magnificent collection - there's a lot of beautiful and valuable art that's not often seen by private collectors or the general public.
Charitable donations of artwork can give rise to substantial tax benefits, but donors need to be aware that not all donations are treated equally for tax purposes.
Many donors are not aware that the use to which the recipient organization puts the art will impact the amount of the charitable deduction the donor receives. Most donors assume that the deduction will be equal to the fair market value of the artwork at the time of the contribution (subject to certain limitations based on the donor's adjusted gross income). This is the case, however, only if the artwork is related to the exempt purpose of the charitable organization. If it is not, then the amount of the deduction is reduced by the amount of gain that would have been long-term capital gain had the donor sold the property at its fair market value when it was contributed. In other words, the amount of the charitable deduction will be limited to the donor's basis in the artwork (i.e. what he or she paid for it) rather than the artwork's fair market value. For donors who have held artwork for a long period of time, this difference can be substantial.
Indiana Jones, quite possibly the most famous treasure-plundering, antiquity-hoarding fictional archeologist of our time, has a way of making the process of art reclamation or, depending on one's perspective, appropriation, look grand. Indy, usually covered with grime, soot, debris and a perfect layer of five-o-clock shadow, dodges boulders, bullets and brutes armed with bows and arrows as he swashbuckles through exotic locales in search of his next great treasure. Of course, real life is never as grand and, despite the ongoing presence of evildoers, intrepid seekers are usually stopped dead in their tracks by much less ominous forces than bullets or giant rocks.Continue Reading...