Domenici-Schumer Bill Would Bring Parity To Investments In Arts And Collectibles, Allow Artists To Donate Valuable Works To Museums
DOMENICI-SCHUMER BILL WOULD BRING PARITY TO INVESTMENTS IN ARTS AND COLLECTIBLES, ALLOW ARTISTS TO DONATE VALUABLE WORKS TO MUSEUMS
Bi-partisan Lawmakers Joined by Artists to Encourage Investments in Arts and Collectibles by Making Capital Gains Taxes on Arts and Collectibles Same as Cap. Gains Taxes on Stocks and Bonds
Bill Encourages Artists to Donate Works in Their Lifetime and Receive Deductions at Appraised Value Instead of Value of Raw Materials
Schumer: Bill Would Treat Investors in Arts and Collectibles Same as Investors in Stocks and Bonds
U.S. Senators Chuck Schumer (D-NY) and Pete Domenici (R-NM) introduced new legislation to bring capital gains tax parity to investments in arts and collectibles today. Flanked by well-known artists, Joel Shapiro, Don Nice, and Sam Gilliam, the Senators offered a bill that would greatly help investments in art and collectibles and also allow artists to donate valuable works to museums, schools and charities. The bill will be offered by Reps. Tom Reynolds (R-NY) and Mike Thompson (D-CA) in the House.
Sen. Schumer said, "There is no reason why artists should be taxed differently from anyone else who wants to donate valuable works to museums, schools, and charities. In a bi-partisan way, we can make sure the tax code is as fair towards investors in stocks and bonds as it is to investors in arts and other collectibles."
"New York is the capital of the art world. The passage of this bill will mean more jobs for New York in an industry that attracts tourists, artists, and investors from all over the world," Schumer stated.
Currently, artists making a charitable contribution to a museum or cultural institution are only allowed to deduct the cost of their raw materials instead of the fair market value of the art donated. This creates a huge incentive for an artist to wait until after they die to donate something to a museum, because it's valued at fair market value in their estate, but if they donate while alive, they get only a deduction for the costs of their materials.
The Art and Collectibles Capital Gains Tax Treatment Parity Act Summary:
This bill addresses two internal inconsistencies in the Internal Revenue Code:
1. Long Term Capital Gains Treatment of Investments in Art and Collectibles
* Lowers the capital gains tax rate for investments in art and collectibles so they would be the same as an investment in stocks and bonds.
* Currently the top capital gains rate for art and collectibles is 28 percent while top rate for stocks and bonds is 15 percent.
2. Charitable Deductions of Donated Artwork by Artists
* Currently, artists making a charitable contribution are allowed only a charitable deduction equal to the cost of their materials instead of the fair market value.
* The bill would give artists a deduction equal to fair market value subject to the work being created at least 18 months prior to the donation and a professional appraisal.
http://schumer.senate.gov/SchumerWebsite/pressroom/press_releases/2005/PR41702.Art%20Tax.060705.html