Wednesday, March 28, 2007

American Chronicle: “Giving is not keeping!”: Sen. Grassley declares war on art donation tax dodge

American Chronicle: “Giving is not keeping!”: Sen. Grassley declares war on art donation tax dodge: "Grassley is tight as bark on a tree and Iowans respect that. But now the man known as the patron saint of whistle blowers and the most underestimated man in Washington was recently given a new title by the New York Times– “the man museums love to hate”.

It seems Grassley’s spied something through his green eyeshade that didn’t add up. Art collectors, using something known as “fractional giving” were donating major works of art over the course of several years, allowing them to spread out tax write-offs and benefit from any appreciation in the pieces–all while retaining them until they’ve exhausted the tax advantage. As it was intended, fractional giving let donors give, for example, 25 percent of a work, keep it in their possession nine months of the year and let the museum display it for three months. But transporting priceless works of art was hazardous and costly so many institutions waved their right to display the pieces until they eventually owned them outright. But this didn’t sit well with the Iowa senator."

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