According to an article in the Wall Street Journal, a proposed change to the 2006 Pension Protection Act may make donating works of art to museums more attractive to wealthy collectors. The current act prevents collectors who pledge a work of art to a museum incrementally from receiving tax benefits on any appreciation of the work’s value. It also limits to 10 the number of years a collector can take to complete a donation, which discourages financial advisors and estate lawyers from recommending this method of donation to their clients.
Democratic Sen. Charles Schumer of New York proposed a bill in August that would extend the period over which a donation could be made to 20 years and allow donors to receive tax deductions on a percentage of the works’ appreciation. These changes are expected to stop the decline of art donations by making partial contributions more attractive to collectors and give the public the opportunity to see works of art that otherwise would have remained hidden in private collections.
Image: Sen. Charles Schumer, courtesy of the Wall Street Journal
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