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Withers art - US transactional and tax updates

24 January 2019 | 3 minute watch

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Withers art - US transactional and tax updates
Play Video

Withers art - US transactional and tax updates

​​​Note: We have provided a transcript of the discussion in this video if you are unable to watch the video version. This transcript is generated using a combination of speech recognition software and human transcribers and may contain errors.

Diana Wierbicki (00:05):  This is the time of year where we reflect on what's happened and look at the opportunities for the future. So we at the withers art team wanted to share our top three with you. So first starting with the tax reform Sarah, what did we lose that's just gone for us with the tax reform. 

Sarah Verano (00:23): Unfortunately, like kind exchanges for art were completely eliminated.

Diana Wierbicki (00:26): Well, what if we had that we have potentially don't have any more now but maybe coming back.

Sarah Verano (00:33): So we had certain deductions that were available for investors and artwork that were suspended until 2026 at which point they might be coming back or we could see more legislation completely eliminating them.

Diana Wierbicki (00:45): So the landscape for deductions has changed. So please make sure that you're talking to your accountants and your lawyers about what's available. What's not and when it may come back and how about leaving things on a positive note. What opportunities do we see with the tax reform?

Sarah Verano (01:00): So we introduce qualified opportunity zones. This is a great new investment vehicle for people who have capital gains to take the most benefit out of this new vehicle. You really should be investing by 2019. 

Diana Wierbicki (01:15): And so this is an area where we've seen so many of our clients are comfortable investing in art, but there are so comfortable investing in real estate. So we see an opportunity here to be discussed and this year was a year that we really focused on the Supreme Court for so many reasons. This year but not to be left out. The Art Market also was focused on the Supreme Court with the Wayfair decision. So Amanda, could you tell us a little bit about that decision?

Amanda Rottermund (01:39): So in June of the summer South Dakota versus Wayfair was an opinion that the Supreme Court issued and you might be thinking what does Wayfair a design online website have to do the Art Market and it very much has to because at the root of this case was a sales tax issue and the sales tax issue was whether States could enact statutes that would require out of state sellers to register in that state to collect that state sales tax with when those out of state retailers didn't have physical presence in the state and the Supreme Court held that yes states can enact such legislation and out of state retailers who meet certain criteria are responsible for registering in these states and collecting sales tax.

Diana Wierbicki (02:24): So it sounds like the responsibility here is Shifting. So whether you are the gallery that just has a physical location in New York, but you are occasionally shipping things to other states or if you're the collector with homes and different states and you want your art shipped there. It sounds like both of those two parties that this this decision is going to have an impact.

Amanda Rottermund (02:45): Absolutely. So everyone should be keeping check of what's happening and all these states touching base with us and following to see his new developments happen.

Diana Wierbicki (02:56): And so the last thing our terms of our top three that we saw this year that we were excited about was blockchain technology. So for years, we'd seen how the financial Market had been influencing the Art Market through bank loans and this focus of art as an investment asset and then more recently there's been this intersection with the technology sector that we're particularly interested with and we think is going to change the landscape for the art world. So when we talk about blockchain, when we talk about cryptocurrencies, that's all entering into our space and it's something that we're really watching for for opportunities in the coming years.

This is the time of year to focus on what’s happened in the art market in 2018 and look at the opportunities to come this year.

Dean Nicyper, Kim Almazan and Lauren Bursey, members of the Dispute Resolution team of Withers’ art law group, discuss the changes in art related dispute resolution issues over 2018, and what to keep an eye out for in 2019.

Click here to watch our US Dispute Resolution video.


​​​Note: We have provided a transcript of the discussion in this video if you are unable to watch the video version. This transcript is generated using a combination of speech recognition software and human transcribers and may contain errors.

Diana Wierbicki (00:05):  This is the time of year where we reflect on what's happened and look at the opportunities for the future. So we at the withers art team wanted to share our top three with you. So first starting with the tax reform Sarah, what did we lose that's just gone for us with the tax reform. 

Sarah Verano (00:23): Unfortunately, like kind exchanges for art were completely eliminated.

Diana Wierbicki (00:26): Well, what if we had that we have potentially don't have any more now but maybe coming back.

Sarah Verano (00:33): So we had certain deductions that were available for investors and artwork that were suspended until 2026 at which point they might be coming back or we could see more legislation completely eliminating them.

Diana Wierbicki (00:45): So the landscape for deductions has changed. So please make sure that you're talking to your accountants and your lawyers about what's available. What's not and when it may come back and how about leaving things on a positive note. What opportunities do we see with the tax reform?

Sarah Verano (01:00): So we introduce qualified opportunity zones. This is a great new investment vehicle for people who have capital gains to take the most benefit out of this new vehicle. You really should be investing by 2019. 

Diana Wierbicki (01:15): And so this is an area where we've seen so many of our clients are comfortable investing in art, but there are so comfortable investing in real estate. So we see an opportunity here to be discussed and this year was a year that we really focused on the Supreme Court for so many reasons. This year but not to be left out. The Art Market also was focused on the Supreme Court with the Wayfair decision. So Amanda, could you tell us a little bit about that decision?

Amanda Rottermund (01:39): So in June of the summer South Dakota versus Wayfair was an opinion that the Supreme Court issued and you might be thinking what does Wayfair a design online website have to do the Art Market and it very much has to because at the root of this case was a sales tax issue and the sales tax issue was whether States could enact statutes that would require out of state sellers to register in that state to collect that state sales tax with when those out of state retailers didn't have physical presence in the state and the Supreme Court held that yes states can enact such legislation and out of state retailers who meet certain criteria are responsible for registering in these states and collecting sales tax.

Diana Wierbicki (02:24): So it sounds like the responsibility here is Shifting. So whether you are the gallery that just has a physical location in New York, but you are occasionally shipping things to other states or if you're the collector with homes and different states and you want your art shipped there. It sounds like both of those two parties that this this decision is going to have an impact.

Amanda Rottermund (02:45): Absolutely. So everyone should be keeping check of what's happening and all these states touching base with us and following to see his new developments happen.

Diana Wierbicki (02:56): And so the last thing our terms of our top three that we saw this year that we were excited about was blockchain technology. So for years, we'd seen how the financial Market had been influencing the Art Market through bank loans and this focus of art as an investment asset and then more recently there's been this intersection with the technology sector that we're particularly interested with and we think is going to change the landscape for the art world. So when we talk about blockchain, when we talk about cryptocurrencies, that's all entering into our space and it's something that we're really watching for for opportunities in the coming years.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.

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