EXPER T S Peter Tabert

MEET THE Fine Art and Tax Benefits

F

ine Art plays a critical role in American lives for its beauty, financial appreciation, and potential tax benefits. The demand for galleries to provide art has dramatically increased.

An art collection needs to be kept in good condition, which may include framing, reframing, lighting, air conditioning, humidity controls, cleaning and other maintenance, security, and insurance. The art investor or collector may travel and incur other buying expenses and fees that increase cost of ownership.

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This article will briefly bring to light some income tax issues pertaining to deductibility of expenses arising from maintaining a collection, and taxability of gains and losses realized on the sale of artwork.

All the above issues may be differently applied if you are classified as a dealer, an investor, or a collector. The presentation will concentrate on investor tax free exchange.

A person investing in art has an objective of making a profit. In determining whether a

OFF THE EASEL MAGAZINE – FALL 2015