Knowledge Center

Monday, August 01, 2016

Fair Warning: Special Tax Treatment May Change for Art Collectors

By: Richard M. Horwood

Special tax treatment for collectors, including the use of private foundations, has provided for unique planning opportunities. However, recent government pronouncements may impact the availability of attractive techniques.

At risk is a provision eliminating the benefits of tax-free like-kind exchange rules for works of art and other collectibles. In addition, a Senate Finance Committee report included observations that some "private museums" may be too private to continue to be eligible for tax-exempt treatment. In both cases, outlined in the article, the discussions have a long road ahead before any action impinges upon the tax benefits that art collectors currently enjoy. That said, as auctioneers often say before accepting a final bid, these proposals may lead to a "fair warning" before the door is closed.


Questions? Click here to contact Dick Horwood.


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