Houston Estate Planning and Elder Law Attorney Blog
The tax law makes clear that the taxpayer has the burden of substantiating the value of the property. To this end, a taxpayer must not only comply with the procedural requirements for valuation, but must also persuade the trier of fact that his claimed valuation is correct.
How do you place a value on art? There is the subjective eye of the beholder that gauges the beauty of the art, and then there is the no less subjective eye of the market, the appraiser and/or the taxman. Be sure to properly plan for your artworks and ensure that they are appropriately (if usefully) valued, as seen through the eyes of the taxman.
The issue of valuation is always the issue at stake when it comes to taxes – be it with regard to real property, stocks, or something as mercurial as an easement – but with art there is both a special importance and a special irony. After all, art is only truly valuable when it is priceless, in one sense, but there is nothing that is priceless on the market.