Sunday, March 04, 2007

Lowry News

The chairman and president of MoMA, Robert Menschel and Marie-Josée Kravis, had a letter to the editor in Saturday's New York Times on the Glenn Lowry story mentioned earlier. They say:

"All actions taken by the museum and the trust were legal, ethical and disclosed. All payments and compensation were reported on tax forms filed by the trust, the museum and Mr. Lowry, who paid personal income tax on compensation he received."

Also, in a recent discussion of this matter Time Magazine's Richard Lacayo said the following:

"Fractional gifts, which have been reined in recently by Congress, allow donors to give a museum a partial and gradually increasing interest in a work of art -- say 10% at first. Over a period of years that percentage can rise in increments until the work has been donated in its entirety. Meanwhile the donors can keep the work at home for a portion of each year while enjoying a tax deduction on whatever percentage they have bequeathed so far. The deduction depends on the appraised value of the painting. It increases if the value increases."

I know this doesn't go to the main point of his post, but I just want to point out that the part I've put in bold above is no longer true; that's precisely one of the ways in which fractional gifts have, as Lacayo says, been reined in recently by Congress. As I posted back in September:

"[T]the new law provides that the fair market value of any additional contributions shall be determined by using the lesser of (a) the fair market value of the work at the time of the initial contribution or (b) the fair market value of the work at the time of the additional contribution. [Thus collectors are] deprived of the benefit of any increase in the value of the artwork over time. Say I donate 25% of an artwork to a museum at a time when the work is worth $8 million and, several years later, when the work is now worth, say, $20 million, donate the remaining 75%. Under the new law, my deduction for the latter contribution will be limited to $6 million (75% of the value at the time of the initial contribution), even though what I have donated is an asset worth $15 million (75% of $20 million, the value at the time of the later contribution)."