Income Tax Planning for Visual Artists, their Dealers, Investors and Collectors


The visual artist, the art dealer, the art investor, and the art collector revolve around the same property. Be it painting, drawing, prints, sculpture, photographs, fabric or glass art, each raises tax problems for which advanced planning can be useful. Sometimes the tax problems of all four categories of people are the same, as in the necessity to prove a profit motive in order to deduct expenses; in other cases, such as on the sale or donation of an artwork, the results seem irrevocably different. This article will explore those similarities and differences, suggest steps advisors can take to maximize tax benefits, and occasionally question whether the similarities or the differences between taxpayers in those different categories, or the rules applied by IRS, make sense.

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