Art investors are usually urged not to invest in art, but to collect it.
They are told to buy what they like and not to buy things they expect to increase in value.
But financial matters still must be considered by collectors, especially when it comes to inheritances, says a story in the New York Times.
Art does increase in value and it can become a more significant part of their financial and tax lives over time.
There are often unpleasant tax consequences for heirs, the story says.
Specialty advisors exist to handle such issues. But it can be difficult to put a value on certain pieces of art. Better to get a lowball estimate from an independent appraiser if you are gifting the piece.
If you are giving the art to a museum, it is best if the appraiser can bump up the value to maximize the tax write off.
The overall message, however, is that planning for art is complicated. However, there are opportunities to make out well tax wise if planning is done right.
