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Date: | Thu, 11 Mar 1999 10:24:40 +0000 |
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+++ [CLIP] +++
On Wed, 10 Mar 1999, Andy Finch wrote:
> In layman's language (which is all I know in any case): there's an
> absolute ban on a donor using an appraisal from a museum to substantiate
> for tax purposes a gift to that museum worth in excess of $5,000. So
> even if the museum said informally that a prospective gift was likely to
> be worth thus-and-such, the statement would be irrelevant when the donor
> files his taxes. For gifts worth in excess of $5,000, the donor must
> use an outside, qualified appraiser.
COMMENT:
Those of us around in the 1970s and early '80s will remember that there's
a good reason for this rule.
Apart from a couple of outright scams (one set up by Americans based in
London in fact - though as a US tax fraud) senior museum personnel were
put under great pressure by potential donors (and sometimes by their own
trustees) to inflate valuations - and things even descended to a sort of
bidding process between institutions. Things got out of hand when
pictures sold in London auctions to private "collectors" or "art
investors" were being "appraised" for tax-deductible donations just weeks
later at far more than the purchase price.
It wasn't just museums that were being used in this way: I heard of a
Church that was put under similar pressure to produce inflated valuations.
Everyone regretted the suspension of appreciated valuation deduction for
entirely legitimate gifts - which took years of hard work by the AAM &
others to get lifted. However, the history should be a reminder of the
need to be scrupulously careful lest abuses provoke another crack-down.
Patrick Boylan
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