Forbes has published an article, “Tax Tactic Of The Ultra-Wealthy: Split The Masterpiece In Two”, which discusses how dividing art ownership is a method in which the ultra-rich wrings tax benefits from their fortunes. The article begins as follows:
For billionaire art lovers, the Rothko, Basquiat or Banksy hanging in the front hall can be a source of pride and joy. It’s also a great way to get a tax break.
Lawyers, already scrambling to help clients prepare for tax changes in Washington that threaten to soak the rich, say they’re increasingly getting requests from art collectors to find strategies to shield their wealth from the Internal Revenue Service. The solution: giving away just a fraction of their ownership.
It’s an opportunity to get a tax benefit tied to surging art values without donating a painting outright. In a typical arrangement, the piece goes back and forth between the donor and a museum, like divorced parents sharing custody of their kids. The owner gets an income-tax deduction based on the fair market value, potentially giving away more slices over time, for as long as 10 years. The art then goes to the charity for good.
Click here to see the full article: “Tax Tactic Of The Ultra-Wealthy: Split The Masterpiece In Two”
Posted by Anthony Tran, Associate Editor, Wealth Strategies Journal