Arts and Humanities Tax Reform Act of 1987

Arts and Humanities Tax Reform Act of 1987 - Amends the Internal Revenue Code to permit the executor of an estate, in calculating the value of the gross estate, to disregard that portion of the value of any copyright or literary, musical, or artistic work, or letter, memorandum, or similar property created by the decedent which would have been ordinary income if such work had been sold by the decedent at its fair market value.

Provides that the amount of the income tax deduction for the charitable contribution of a literary, musical, or artistic composition created by the taxpayer shall be the item's fair market value, unreduced by the amount of long-term capital gain that would have inured to the taxpayer if the contribution property had been sold.

Disallows such estate tax valuation and unreduced charitable contribution deduction treatment if the property was produced while the taxpayer was a government officer or employee and arose out of the performance of the taxpayer's duties.

Permits a tax deduction for the business use of a home if such dwelling unit is used to a substantial extent (rather than exclusively, as provided under current law) for the taxpayer's trade or business. Requires the Secretary of the Treasury to submit to the appropriate congressional committees legislative recommendations with respect to such a deduction.