Opinion: Congress Was Right to Limit Tax Break for Art Gifts

A tax deduction that encourages donors to give museums partial ownership rights to important art pieces has resulted in little benefit to society, illuminating the motivation behind an August change in federal law to limit such donations, writes an opinion columnist in The Baltimore Sun.

The article, written by Jay Hancock, focuses on paintings owned by Anthony W. and Lynn Deering worth approximately $2-million that were donated to the Baltimore Museum of Art.

The Deerings donated a half-interest in the paintings to the museum in 2005, but the works spent just one month hanging for public display, Mr. Hancock says. Meanwhile, Mr. and Mrs. Deering received a substantial tax break by making the donation, he noted.

Congress in August voted to tighten the deduction rules, so now donors have to give full ownership of a painting to a museum within 10 years and face other limits that make this approach less attractive financially than it used to be.

Mr. Deering says the museum could have the paintings he and his wife have pledged anytime it wants to display them. But he says the new law is “fairly onerous” and would lead most people to wait until they die to give their artworks to museums.

Mr. Hancock says, “That’s not such a bad idea.” Philanthropy, he says, should be “more about helping cultural institutions and less about lawyers, tax planning, and having the government subsidize private enjoyment of art.”

Read The Chronicle of Philanthropy’s coverage of the partial-donation legislation and also an opinion piece on such donations.

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