Whether you are dealing with art given to you as a gift, or art you inherited as part of an estate or art that you are giving as a charitable donation, there are plenty of potential tax implications. An experienced tax attorney can help you avoid potential tax problems that can arise where there is no art appraisal or there is an incorrectly performed appraisal.
When does the IRS order its own art appraisals? The IRS requires that its own Art Advisory Panel appraise any artwork reported by a taxpayer with a claimed value of more than $50,000.
Who is part of the Art Advisory Panel? You won’t find a tax lawyer on the Art Advisory Panel. Instead, it is made up of 25 different artists, art historians and museum curators who serve without compensation.
What about art with values below $50,000? For deductions claimed on art pieces with a value greater than $5,000, you need to receive a written deduction from a qualified art appraiser. For pieces with a value of between $5,000 and $20,000, the IRS also requires a photograph of the art along with the written appraisal.
How long should I keep a copy of the appraisal? The IRS can challenge any valuation of greater than $5,000 for up to four years after the initial filing, so the Law Offices Of Jeffrey B. Kahn, P.C. strongly recommends that you store copies of this information where you can retrieve it when needed.