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V O L . X X V I I N O. I V F E B R UA R Y 2 2 , 2 0 2 1 12 W E A LT H M A N A G E M E N T / R E T I R E M E N T F O C U S spring, all of a sudden we were seeing we were able to reach a virtual audience of 10 times that. at became a really nice connection for our collectors and artists." Located at 154 Middle St. in Portland's Old Port, the Portland Art Gallery represents 55 established and emerging artists. One of them, Waterville-based landscape painter Matthew Russ, says that 2020 was his best year in terms of number of works sold and revenues, owing in part to virtual events. A longtime fan of in-person show openings, Russ was surprised to dis- cover the virtual versions were "really quite inspiring, and in some ways a little more intimate." at has helped bring in new cli- ents during the pandemic. It started on a hopeful note last April when a woman bought one of his paintings for her daughter's birthday and to support an artist who might be facing an uncertain future. "at was a bright spot at the begin- ning of everything and led me to believe that even though things are going to be quite difficult in months to come, art- work might still be on people's minds," Russ says. Glad that turned out to be true, he says, "People are spending much more time online, so perusing artwork and looking at images that bring joy and peace and solace was all part of that." Art and money matters Regardless of what motivates people to invest in art, it can have financial payoffs over time, and is of great interest to advisers in determining client wealth. "As financial planners, we're always looking at the total client picture, so any kind of substantial collectibles factor into somebody's net worth," says Susan John, a Wolfeboro, N.H.-based manag- ing director and private client advisor at F.L.Putnam Investment Management Co. "When you figure out someone's tax and liquidity needs, you need to know that stuff is available." » C O N T I N U E D F RO M P R E V I O U S PA G E Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as "MLPF&S" or "Merrill") makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation ("BofA Corp."). MLPF&S is a registered broker-dealer, registered investment adviser, Member SIPC and a wholly owned subsidiary of BofA Corp. Investment products: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value The Bull Symbol is a registered trademark of Bank of America Corporation. © 2020 Bank of America Corporation. All rights reserved. MAP3088376 | AD-10-20-0392 | 472575PM-0520 | 10/2020 Portland, Maine Office Merrill Lynch Wealth Management One Monument Square Portland, ME 04101 207.775.3755 local.ml.com/portland_me When the world changes, we're here to help Supporting your community is important to you — and to us. That's why we're committed to helping you make a difference. Tax tips for art collectors W hat should art collectors know about the tax impli- cations of selling or donating art? Here's what two experts told Mainebiz. When it comes to selling, art and other collectibles are in a unique category, according to Jean McDevitt Bullens, tax principal at Baker Newman Noyes. "There is a bit of a tax rate premium for artwork and all other collectibles," she says. For example, works of art and other collectibles are generally taxed at a maximum 28% capital gains rate for federal purposes, compared to a maximum 20% rate for non-collectibles. As far as donating, McDevitt underscores the need to distinguish between a charity that's going to use a piece in its collection ver- sus one that may sell it to generate income. "If you donate the art to a museum, for example, you get to take the fair market value of the art piece as a starting point for your deduction," she says. Mar tha L. Fox, of counsel at law firm Preti Flaherty, has two additional pieces of advice related to donating art. She recommends getting an acknowledgment from the recipient organiza- tion describing the gift in detail, and finding a reputable appraiser for the object or objects concerned. "If the IRS later challenges the value you've assigned to a donation, you will want to have a reputable appraisal available to substantiate that," she explains. For someone unable to find an appraiser in the relevant field, "I would suggest talking to the organization you're considering donating to, as they may be aware of experts in the particular area." There is a bit of a tax rate premium for artwork and all other collectibles. — Jean McDevitt Bullens Baker Newman Noyes C O U R T E S Y / P R E T I F L A H E R T Y Jean McDevitt Bullens Martha L. Fox C O U R T E S Y / BA K E R N E W M A N N OY E S Those who spend the time and make the effort will be rewarded financially as well as aesthetically. — Susan Larsen Dorothea and Leo Rabkin Foundation

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