My Tips for Building an Amazing Collection of Art

Several clients have asked me for collection advise this year, so I wanted to compile a list and share my thoughts. Here are My Tips for Building an Amazing Collection of Art.

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My Tips for Building an Amazing Collection of Art

·       The oldest advice is still the best… buy what you like and want to live with.  The corollary to that advice is to know what you are buying.  The more knowledgeable you are, the better pieces you will choose.

·       If you are interested in work by living artists, get involved in your local gallery scene.  Local dealers normally have a stable of artists they represent.  They curate their stable of artists based on their own tastes and are happy to tell you all about any of their artists. Local galleries also host openings and gallery walks that are fun social events where you can meet the artists, see the work in person, and ask any questions you have. 

·       Consider visiting and buying from multiple dealers.   Your local gallery dealers’ association likely has ‘art walk’ events where they coordinate their openings a couple of times a year.  It’s the art equivalent of a ‘pub crawl,’ and a great deal of fun whether you imbibe in the free refreshments or not.

CADD - Contemporary Art Dealers of Dallas

·       When you travel, visit local galleries.  You might find a new artist to collect and a good piece of art is a better remembrance from a vacation than a cheap tchotchke.  

 ·       Be aware of Art Fairs in your area - there are art festivals and craft shows throughout Texas and in neighboring states that are worth attending. Fairs let you see and support one-of-a-kind work from emerging and local working artists and they are a great way to meet the artists in person and chat about their work. In DFW there is the Dallas Art Fair, the Denton Jazz Festival, the Deep Ellum Arts Festival, the Houston Music & Arts Festival, the Main Street Fort Worth Arts Festival, the The Woodlands Waterway Arts Festival, Art in the Square in Southlake . . . to name a few.

·       In a retail gallery, a gentle hint about discounts can pay off.  Many galleries give their return clients a small discount as a client loyalty bonus, 10-15% is common.  It never hurts to gently ask for a discount. 

Scottsdale Art Auction, 2016 - The auctioneer is taking bids on an original Kyle Polzin painting

·       If you are interested in earlier works, pieces by deceased artists, pieces by internationally known artists or pieces by western artists. consider buying at auction. With today’s fast online communications, collectors are finding it easy to buy great pieces directly from auction. Although attending in person is fun, exciting, and highly recommended, you can also bid online and watch the auction live online.  If you’ve never bought at auction and want some help, we are available to advise you or place proxy bids on your behalf.

·       If you want to buy at auction, check out the auction house before you bid.  You want to buy from a business with a great reputation.  I would avoid the ‘online-only’ category, the weekend-hotel ballroom bankruptcy auction, and any auction on a cruise ship. 

·       Consider getting pre-purchase advice when considering a new piece.  Call when you are considering a piece and let an appraiser do some background research before you buy.  The fees you pay for a few hours of research can give you objective information on the artwork and help you know the fair range to pay.  Knowing the fair range to pay can give you a strong negotiating position and save a LOT of money.

·       If you want to collect prints, spend some time learning about the different types of printmaking.  There are lots of different ways prints can be created.  Each has a specific look.  This is a bit over-simplified, but the most important thing to know is this… is the print original or a reproduction?  Original prints are collectible.  Reproduction prints use photomechanical technology to copy the work of an artist. Reproduction prints are wall décor.  They will never be collectible.  Original prints might be collectible and might rise in value. There are no guarantees, of course.  Just avoid reproduction prints and stick to collectible prints.

As always, give us a call or shoot us an email with any of your fine art needs, we are happy to help!

-Brenda

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Charitable Donations of Art: A Few Important Rules to Know

Every year in December we get a few calls from potential clients who are desperate to make sure we can do a donation appraisal for them before the end of the year.  Usually, they’ve had a recent meeting with their accountants who suggested a noncash charitable contribution as part of a tax-reduction strategy.  Of course, the most desperate callers are phoning in mid-late December.  So, every year we get the opportunity to walk at least a few potential clients through the rules that apply to such donations.  I thought providing a simple set of instructions here might be of help.  

First, we, the appraisers are not the first call to make.  The first call/s to make are to potential 501(c)3  charitable organizations to whom you are considering donating.  The appraisal can be done at any time after the donation is accepted up until the filing of your taxes for the year.  If the appraiser is called first, the appraisal for charitable donation is only valid for six weeks prior to a donation being made.  If the donation is made later than six weeks from the effective valuation date of the appraisal, the appraisal is invalid.  Call us after the artwork has been accepted for donation.

 Here a few items to be aware of when considering a charitable organization:

·      The Charitable organization has to be a valid 501(c)3 organization.

·      Your donated items have to meet the “related use” clause, meaning if you are donating artwork, showing artwork must be within the donee organization’s purposes.  The organization does not have to be an art museum.  But showing art and maintaining an art collection must already be a part of their agenda as an organization, at least to some capacity.  Many hospitals, universities and other schools might qualify.  So, some thinking outside the box can help you find the right charitable organization.  

·      The donee must keep the artwork for a minimum of three years.  Giving artwork to your church or synagogue’s yearly fund-raising dinner does not qualify.  That’s still charitable giving, of course.  But the donor will only be eligible to receive donation credit for the amount the item sells for at the event, not the fair market value.   

·      You cannot just choose an organization and show up at the doors with your items in tow, looking for a place to leave them.  Most eligible charitable organizations where artwork would be donated have committees in place to review and accept or deny potential donations.  Some are only looking for items by certain artists that fille specific holes in their collections.  Others have a broader scope of items they will consider.  But you must contact the potential donee, ask about the process of accepting donations and get the ball rolling.  This can take time.  If you have waited until December to pursue a donation,  you may be looking at the next tax year for the donation to occur.  

Once the donation is accepted, you may need an appraisal from a qualified appraiser. Here are a few things to be aware of regarding the appraisal: 

·      If you are donating an item or group of related items that are less than $ 5,000, you are not required to have an appraisal.  If above that amount, an appraisal is required.   

·      If the value of the items is above $ 5,000 but under $ 20,000, the appraisal is required but you are not required to include a copy of the appraisal with your tax filing.  If the value is $ 20,000 or above, a copy of the appraisal is required to be included with your filing.   

·      If you are having an appraisal done, the appraiser will provide you with the form 8283 for inclusion with your taxes.  This form has elements to be filled out by the appraiser, you as the donor, and the donee organization.  You should take the 8283 form from the appraiser, fill out the elements that pertain to you and secure the signature acknowledging the donation from the charity.   

·      The Declaration of the Appraiser found on form 8283 warrants that the appraiser is qualified to appraise the items, that he/she has no financial stake in the artwork or the stated value and alerts the appraiser that if he/ she is party to gross misstatement of  values within the appraisal, he could be prosecuted and or fined.  

·      The IRS provides a definition of who is a ‘qualified appraiser.’ Not every person who holds themselves out to be an appraiser of personal property meets the definition of being “qualified.”  So, if you are considering a donation, make sure to review the Professional Profile of any appraiser you are considering.  Make sure they are at the very least accredited with one of the three main personal property Appraisal organizations (ISA, ASA or AAA) and they do appraisals of the type of property you need appraised for IRS purposes on a regular basis.  

·      IRS appraisals are definitely subject to review.  Higher value artwork will likely be reviewed by the Art Appraisal Review Board, a volunteer group of artworld professionals. Your charitable deduction can be lowered or eliminated if the appraisal is not properly prepared.  For higher value artwork, the appraiser must include images of all comparable pieces considered and a full written analysis of the valuation process and conclusions.   

·      As the donor, you are eligible to get a tax credit for the Fair Market Value of the donated items.  This type of value has nothing to do with the amount you paid for the pieces, how many years you have owned them, or the values they are carried at under your insurance.    

·      The IRS defines fair market value as “the price a willing, knowledgeable buyer would pay a willing, knowledgeable seller when neither has to buy of sell.” (Page 2- “Instructions of Form 8283”).  Defining the appropriate marketplace in which to seek values and making credible arguments regarding the FMV of each item is the job of the appraiser.   That is why you need a well-trained, seasoned appraiser!

·      The appraiser you intend to engage should be willing to speak with you about the process of the appraisal and should be familiar enough with the work to be appraised to know whether their services are required.  Remember, an appraisal is not necessary if the value of the donation is under $ 5,000.  However, an appraiser is not ethically allowed to speak to anyone about a desired value result.  A good appraiser would not even consider taking on a job with an expected value conclusion. That is strictly unethical.   

When donating or downsizing your art collection, it is imperative you understand the options available to you. We understand the amount of time and emotion that goes into building a collection.  That same attention is required when finding the right place to gift a piece of art.    

If you are in need of an appraisal for your artwork donation, give us a call.  We have written hundreds of donation appraisals over the years for our clients, many of which have gone to the IRS Art Appraisal Review Board.  Our appraisals are written to the highest quality, conform to the Uniform Standards of Professional Appraisal Practice (USPAP) and to the Ethical Standards and Report Writing Standards of the International Society of Appraisers.

We would be happy to be of service.

Brenda