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Examples Of Great Original Art Depreciation On Resale?

Started by jick,

45 posts in this topic

Terry Doyle

Terry Doyle

Posted
Posted

Reason why I'm probably an exception, here, not taking any losses on re-sale is down to the fact a lot of the art I parted with over the course of the past ten years or so was bought a long time ago (1982 onwards). Most prices escalated sharply in value with the advent of the internet, so was extremely difficult not to make big gains during times of re-sale.

 

 

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furthur

furthur

Posted
Posted

Like many people in the hobby, I keep a spread sheet of what I pay for stuff plus various other pieces of information including the seller, condition, etc. I started it to just have the information handy and then figured it would be a good reference point if I got hit by a bus and my wife and kid were trying to figure out what things were and how much they might be worth. Of course the most interesting piece is the "current value" line. Often, when I buy something new by an artist I don't know well and almost always when I buy a commission piece I immediately knock 20% off what I have paid as a current value. I revisit values once or twice a year and try to be pretty conservative since I am not using it for insurance valuation, just for myself and potentially my heirs and I don't want to make things look rosier than they are. I am a cheap so I would guess the worst of it might be a loss in the 20-25% range, but that is going to be with pieces that all cost less than 5K. The winners, on the other hand, are almost always pieces I paid less than 1K for-mostly in the 80's and 90's and they should easily outweigh any losses on more recent buys. In fact I have a commission piece that the artist just told me was done yesterday. I am almost certain its worth less than I paid if I were to sell on the open market, but it will never make it to the market until I am gone unless I live too long and my wife has to sell to keep me in adult diapers and drool cups.

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vodou

vodou

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Posted

Since the subject of taking tax losses is headlines right now, depending on who is holding this...a couple of friends or frenemies (in the comic re-selling business, let's say) could stair-step the piece all the way back down to something reasonable (like $150k) by passing it back and forth over a number of years and netting the "loss" of $100k per transaction (for example) out against their other gains for the year. All the while retaining ownership/control of the piece and the capital, never actually putting any new capital at risk or moving it outside the trusted circle. Essentially the opposite of pumping a piece/the market up with false or managed bids ;) But just sitting on the unrealized loss while paying full taxes on other similar gains is...short-sighted, if not outright stupid.

 

Merely a What If? speculation above, not a recommendation to act (and possibly trigger an audit). Seek and pay for the advice of a professional accountant first.

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