Ask A Question

How can art collectors benefit from Opportunity Zones?

In the past, art collectors could use the Section 1031 but after that changed, I’ve heard that OZs could offer advantages. How?


Answers
  • Matt Campbell
    October 02, 2019

    It would have to be a gallery that buys and sells pieces in my view and otherwise be an active trade or business in my view. The pieces held as part of that business for long-term appreciation might benefit from the overall exit, then.

  • David Mieczynski
    October 02, 2019

    The benefit of investing in an Opportunity Zone is that the re-investment does not need to be alike. This means art for art, real estate for real estate, etc.

  • Brad Cohen
    October 02, 2019

    For sales by non-artists, they can roll capital gain into an OZ.

  • Marc Schultz
    October 05, 2019

    You need to operate a trade or business and cannot be operating for investment purposes.

  • Jonathan McGuire
    October 03, 2019

    You would have to operate this as a trade or business. So unless you are brokering the art our running a museum/art gallery, I find it difficult to truly create a QOF for purely art collection.

  • Erik Kodesch
    October 03, 2019

    I'm not sure, but I guess it would be the ability to roll gain from a sale of art into an OZ investment. It's the same benefit as sale of stock.

  • Matthew Rappaport
    October 02, 2019

    There was one article about this that was not very well-informed. The only way I can see art being part of a QOZB is if the QOZB operates an art gallery, buying and selling pieces regularly for 10 years, and then the QOF sells the art gallery. Not exactly an ideal way to approach the QOZ program.

  • David LeGrand
    October 02, 2019

    The only benefit I see is that if you sell a work, you can roll the capital gain into an OZ and minimize taxes.

  • Peter McNeil
    October 04, 2019

    A capital gain from any source, including the sale of art held as an investment, can get that gain deferred by investing in an Opportunity Zone fund. Tax deferral opportunities are not just for real estate anymore.

  • Maria De Los Angeles Rivera
    October 06, 2019

    Collectors who realize capital gains subject to federal income tax can benefit from the deferral, step-up and latter exclusion as any other taxpayer realizing capital gains.

  • DISCLAIMER: 

    the information found on this website is intended to be general information; it is not legal or financial advice. Specific legal or financial advice can only be given by a licensed professional with full knowledge of all the facts and circumstances of your particular situation. You should seek consultation with legal and financial experts prior to participating in any aspect relating to Opportunity Zones. Posting a question on this website does not create an attorney-client relationship. All questions you post will be available to the public; do not include confidential information in your question.