“THERE’S JUST NO POINT IN DOING IT:” CALLS TO PERVERT THE LAW SHOULD BE IGNORED
DATELINE: July 24, 2008, Chicago
"There's just no point in doing it," claims Jon Shirley, who together with his wife, has donated major works of art to the Seattle Art Museum. In A Portrait of Art as a Tax Deduction, Wall Street Journal reporter Mike Spector explains why. Prior to the enactment of the Pension Protection Act (PPA) in 2006, rich art lovers could give their works to art museums in what were highly tax-favored transactions. To illustrate, assume Tom Collector owns a Jackson Pollock valued at $10 million. He paid $2 million for it. The tax law said that if Tom gave it to the Art Institute of Chicago, he could claim a $10 million deduction for it, even though he paid $2 million for the painting. That means his $8 million gain escaped tax, but he received credit for the gain in calculating the amount of his tax deduction.
Now, let's consider a plumber who has bills at $150 per hour. He donates 20 hours of his time to the Art Institute of Chicago to...
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