Tag: fractional ownership

Fractional Gifts May Return?

Donn Zaretsky gives some helpful background on the potential return of fractional gifts of works of art to art museums.  The end of the practice sharply curtailed the donations received by museums, and were just one in a number of recent measures which has made it difficult for museums to find traditional revenue streams. 

He notes:

The new bill focuses on these two issues [that the gift be completed in 10 years, and ensuring donors cannot unfairly use the increase in value of a work of art after the initial contribution], and basically tracks the “agreement in principle” among members of the Senate Finance Committee that was described in a New York Times article in July of last year:

First, it was reported that “amendments hammered out by aides to Mr. Schumer and Mr. Grassley would lengthen [the 10-year donation period] to 20 years” — and that’s exactly what the new bill provides.

And second, it was said that Grassley appeared “willing to allow donors to claim deductions for subsequent donations that reflect increases in the value of the portion of the artwork they still own.” That is also now reflected in the bill.

Questions or Comments? Email me at derek.fincham@gmail.com

Repatriation Fuelling the Art Market

In today’s New York Times, another article on how the art market is booming. One of the reasons has been the recent repatriation of art looted by the Nazis in World War II. I discussed the Klimt’s earlier this week, but there are also works by Kirchner, Vuillard and Picasso.

This remains an interesting issue. When courts and commentators speak of repatriation, it is often done so in terms of how these pieces of art have been taken during the war, and how they should be returned to the heirs of the original owners. An unacknowledged issue though, is how valuable these works are. There value can be so high, that its simply not economically feasible for the current claimants to hold on to them, and they end up auctioning them. Perhaps instead of simply awarding title to the paintings, courts may want to fashion compromises. They could agree to a fractional ownership scheme, allowing a claimant to hold on to the work for a certain part of the year for example. Or they could agree to a one-time payoff. In the United States, replevin actions are the primary mechanism which claimants use to seek the return of works of art. However, ownership disputes spanning 60 years are not always easily solved by awarding title to one party or another. A better solution may be a compromise between the parties.

Questions or Comments? Email me at derek.fincham@gmail.com