As an update to our analysis of the effect of the proposed “Tax Cuts and Jobs Act” on the art market, we review below the Senate Joint Committee on Taxation's Description of the Chairman's Mark of the “Tax Cuts and Jobs Act” which was released on November 9, 2017.
The Senate's proposal is consistent with the proposed House bill on the following points which appears to increase the likelihood that we will see these provisions in the final version of the bill:
- Elimination of 1031 like-kind exchanges for art*
- Retention of a 28% capital gains rate on art and collectibles*
- No change to charitable contributions of works of art*
The Senate proposal is inconsistent with the proposed House bill on the following point which makes it unclear as to whether the provision will survive in the final version of the bill:
- Struck requirement that operating foundations be open to the public for at least 1,000 hours during a taxable year