Collecting Art Is Not Always About Getting
When you lend your work to a museum, the audience gets to view a piece of art they would not have seen otherwise.
Lending art to a museum or gallery has several advantages. So you get to meet new people, share your passion for art, and maybe even earn a tax break. This is an excellent alternative if you don’t have enough space on your walls.
Like everything else, there are hazards. Your work will be transported, may be damaged, and will be in the hands of others outside of your control. Understanding the pros and dangers of lending your art will help you decide whether it is good for you and your collection.
Don’t Forget These 9 Points When Lending Art to a Gallery
1. Formalize the loan agreement
The loan agreement identifies you as the owner of the art and outlines the loan. Dates agreed upon, location (borrower), title(s), and exhibit(s) if applicable.
The loan agreement should include updated appraisal values and condition assessments. In the event of damage or theft, you will be paid. If you need a display, make sure it’s ink. Keep this agreement, appraisal value paperwork, and condition reports in your Artwork Archive account.
2. Obtain the Best Insurance
Aside from your proper art insurance, the museum should also offer one. This should be “door-to-door” coverage. From the moment it leaves your home until it is safely returned, the artwork is protected for any repairs or appraised worth.
Victoria Edwards of Wasserman & Associates Insurance Agency, LLC explains how to ensure your paintings. You want to ensure that when they pick up the picture at your house, it is covered in transportation at the museum and back home. You should also be designated as the loss payee for any harm.
3. Research Before Shipping Your Art
As stated above, shipping damage should be covered by your policy. A condition report of each component is required before shipping. You will be paid for mishaps. UPS and FedEx’s insurance policies exclude artwork.
Derek Smith, President of AXIS Fine Art Installation, told us this. Consult a conservator for special packing and shipping instructions. “Knowing every good conservator in a market,” Smith adds. They have expertise in transportation and repair, which means they can avoid damage. “It can’t be restored to its previous glory,” Smith confesses, safeguarding your collection.
4. Use it to save space
Most museums accept free art loans. If you have more art than you can exhibit, consider lending it instead of buying a storage container or paying monthly storage fees. Find out more about storing artwork at home here.
5. View it as a charitable gift and a learning experience
Remember that you are giving your collection to a community show, not to a charity. A museum loan shows the public your love for art. This is also a great way to learn more about your artwork since the museum will give academic facts. Being a part of a museum collection or exhibit may help the community know more about an artist you like.
6. Examine Tax Benefits
“Is there a tax advantage if it’s a charity contribution?” you may wonder. Consult a tax professional about any potential tax advantages for leasing your painting to a gallery. According to the New York Times, a lady in Nevada just acquired Francis Bacon’s triptych “Three Studies of Lucian Freud” for a cool $142 million. The buyer may avoid paying almost $11 million in taxes by lending the artwork to a museum in Oregon, which has no sales or uses taxes. The following part will discuss the use tax.
As the lender, you should be aware of any tax savings you may wish to take advantage of.
7. Remember, you may owe taxes.
Some fine art may be liable to a “use tax” when loaned to a gallery or otherwise utilized. If the Washington state use tax is not paid at the time of purchase, it is payable when the items are delivered to Washington. Washington’s use tax is 6.5 percent, the same as their sales tax, and is based on the value of the items entering the state. This is important if you bought art in California and wish to donate it to a Washington museum.
Taxes are state-specific. The museum or borrower and your art insurance providers should inform you of any future tax benefits or expenses.
8. Avoid Seizures
You wish to prevent any legal action against your work. A simple ownership issue might arise when the bill of sale isn’t available. Statute 22 safeguards culturally valuable or national interest artifacts from government confiscation. Artwork or items protected by Statute 22 may be requested by a non-profit museum, cultural, or educational organization. This shields the thing from legal action.
If you loan your artwork overseas, be sure it is similarly covered. So it can’t be seized due to doubts about its legitimacy, owner, or other issues. If your in a hurry and need cash check out GAD Capital home page for more loan options.
9. Specify Your Needs
You must include any particular demands and conditions in the loan agreement. For example, whether you want your name on the artwork or where you want it in the museum. A loan agreement requires meticulous attention to detail, even if it is boring. Then, engage your insurance agent or estate planning attorney to ensure that your wishes and anxieties are handled in the loan agreement and the issues highlighted below.
Loaning art is a terrific opportunity to give back to the community and share your passion for art. Getting engaged with museums also connects you to their resources, conservators, and curators who may help you define and grow your art collection.