Art experts have complained that the repeal of the estate tax would decrease donations to charitable organizations. Since art collectors would no longer have to worry about paying an estate tax on their high-value collections, there would be no incentive to reduce estate tax liability by donating to charities. Sotheby’s CEO, Tad Smith, has a different perspective on the debate. Smith believes that many wealthy individuals put off selling or donating their collections until death in order to benefit from the step-up in basis. “A lot of people delay selling their art or transacting in the art market until some event happens, until the estate tax kicks in. So, eliminating the estate tax is a reason to eliminate the delay. So I think it will provide more liquidity to the market.”
See Robert Frank, Killing the Estate Tax Could Help Art Sales, Sotheby’s CEO Says, CNBC, October 16, 2017.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.
