You may have heard there is a relationship between art and tax deductions. It’s not as easy as you think. I don’t want you to fall into a world of misconceptions as nothing is that easy in the world of taxes. So, is buying art helping in tax deduction or is it just a myth? We are here to explain this burning question to give you some clarity over this. Keep reading.

As an average art buyer, it’s really hard to get tax deductions as generally buying art is not a tax-deductible expense. But again, professional artists, investors, and dealers can appoint themselves favorable tax treatment.

So, before you dig deeper into this process, take a look at the rules about deductions and case tax law that can help you make the decisions. In this discussion, we will also take care of some mistakes that can be made when thinking about taxes and buying art.

What is deductible?

For tax purposes, a deductible is an expense that an individual business or a taxpayer can deduct from adjusted gross income while completing a tax form.

About Art purchases and deductions

Generally, a tax-deductible expense is something that is referred to as ordinary, reasonable, and necessary that aids a business to generate income.

But when you consider the purchase of artwork as a way to lower your personal or business tax burden, this definition already brings up red flags.

There are some blurry lines when art is contrasted with antiques. For example, you have an antique desk that is used for work. You can use it for tax deductions.

According to the IRS, there are some strict considerations. You need to show whether you are making money from the process or not. Again, if you are classified as a hobbyist or not. If you fall into the second category then it will not mean much in terms of tax deduction availability or any other favorable tax treatment.

Rules about Professional artists, dealers and Investors

If your actual job matches the art world, in that you are an artist or an investor preserving or acquiring art, then you get a higher chance of deductions and tax write-offs.

But there is a condition, this is only ever going to come into effect if you are selling the artwork or making money from the creation. For more detailed information, see the tax case titled Barcus v Commissioner 32 TCM (CCH) 559, 673.


There are certain limitations too. To be more clarifying, collectors do not fall in this same category, and nor would rather purchase art passes. To get recognized by the IRS, you need to be pursuing collecting artwork as more than just a mere hobby.

Tragically, most people who purchase or sell artworks are going to be referred to the latter category of the collector. So this has the cons of not being eligible for many deductions or favorable tax treatment. You need to be aware of only one warning for this when selling or giving collections to charity.

Main Concern

The main concern is often appreciated, or the rising value of an artwork. a tax burden is generated when a collector sells the appreciated art. In this case, this gain in value is treated as income.

Some art collectors take help from trusts to get around this issue, or the art collector can take a charitable deduction on their income tax return.

To get this, you have to answer a whole list of questions the IRS made. They will expect you to answer to prove that you are a professional artist rather than a hobbyist. So they can understand your motive is that if you are primarily profit-motivated rather than just love to be in the art world for aesthetics purposes only.

Also, they can ask you whether you have made a profit in three of the last five years, whether you love to keep detailed records, whether you depend on income, and many more questions.

What is depreciation?

According to the IRS, an annual income tax deduction allows you to recover the cost or other basis of certain property over the time you use the property.

Role of Art Depreciation and Deduction

You can claim a tax break, exemption, or credit via depreciation assets. However, there are also certain rules you need to follow. Not all properties cannot be depreciated. For example, if you think an artwork including paintings and sculptures will qualify for a depreciation deduction, it will not. The actual reason behind this is these artworks do not wear out and get consumed through their use in a business.

If the item does not undergo this process of becoming obsolete or being used up totally, the artwork fails at one of the main requirements to apply for a depreciation deduction.

Tax deductions for gifts of art

You can get a  small deduction that can happen if you purchase the artwork to give as a business gift. In this case, the maximum is $25 per gift per person, the gift cannot be less than $4.Yes, there is not very much point to these types of deductions, but you can use them.


So, we understand that art does not take a good tax deduction for the average art collector. Only if you are using the art in a for-profit business, then only it can be deducted.

So, overall if the art greatly appreciates, you can easily make a charitable donation of the artwork and claim a huge deduction. If you are searching for art-related tax incentives, this is the most important tax benefit.