Thompson Offers Bipartisan Legislation to Lower Capitol Gains Tax on Art

North Coast Congressman Mike Thompson (D-Napa Valley) teamed with Congressman Tom Reynolds (R-NY) this week to introduce bipartisan legislation that would allow for greater tax deductions for charitable donations of art and collectables.

The Art and Collectibles Capital Gains Tax Treatment Parity Act (H.R. 2786), will allow artists to claim a fair market tax deduction for charitable donations of their work. Under current law artists, authors, musicians and scholars may only deduct the cost of materials used to create their works, not the fair market value of the product.

“This legislation is about fairness,” Thompson said. “If an individual donates stocks or bonds to charity they receive a deduction for the full value. But under current law if an artist donates a creation they only receive a deduction for the value of raw materials used to create it.”

The legislation would set certain limitations to protect against potential abuses. For example, the safeguards include a provision requiring eligible works to be at least 18 months old and to be appraised in accordance with strict Treasury Department regulations.

The bill has been referred to the House Committee on Ways and Means of which Reps. Thompson and Reynolds are both members. Senators Pete Domenici (R-NM) and Charles Schumer (D-NY) introduced companion legislation in the Senate.

“This bill is particularly important to creative and art abundant regions like California's North Coast. I look forward to working with my colleagues to pass this legislation,” Thompson added.