Recently a wave of unscrupulous promotors have encouraged taxpayers in the high-income brackets to purchase various types of art at what they allege to be discounted prices. The promotors may offer to store the art and arrange for an appraisal for the art before later donating the art. At the time of donation, the appraisal is much higher than the true value of the art. Taxpayers should be aware that although art may be properly appraised and donated for a tax deduction, this type of scheme is illegal and should raise red flags to taxpayers considering participation in the scheme.
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