Tax Briefing Drawing up a Plan: Tax and Wealth Planning for Artists and Art Collectors

The phrase “art appreciation” is a wry double entendre:  Art is “appreciated” for its aesthetic value, but can also “appreciate” in economic value.  Art can prove highly “rewarding” in both a fanciful and a financial sense.  Recent art sales in some categories are enjoying historically high prices.  

In March 2021, an NFT for a digital artwork entitled “Everydays: The First 5000 Days,” created by artist Mike Winkelmann (also known as Beeples), sold for a staggering $69.3 million, the third highest sum ever paid at auction for an “original” work of art by a living artist.   These eye-popping prices have renewed scrutiny from hard-eyed investors looking to see what there is to see in one of the most ancient and venerable classes of investment assets.   Meanwhile, dramatic changes in federal tax law have glossed over and colored the tax and wealth planning strategies that can and should be used.   Our…