Art and Collectibles Capital Gains Tax Treatment Parity Act - Amends the Internal Revenue Code to: (1) eliminate the 28-percent capital gains tax rate for collectibles, thus allowing gain from the sale of collectibles (including art works) to be taxed at the 15-percent tax rate applicable to other investment property; (2) allow the creator of a literary, musical, artistic, or scholarly property a fair market value tax deduction for the donation of such property to a tax-exempt organization, if properly appraised and donated no sooner than 18 months after its creation.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1186 Introduced in Senate (IS)]
109th CONGRESS
1st Session
S. 1186
To amend the Internal Revenue Code of 1986 to provide the same capital
gains treatment for art and collectibles as for other investment
property and to provide that a deduction equal to fair market value
shall be allowed for charitable contributions of literary, musical,
artistic, or scholarly compositions created by the donor.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 7, 2005
Mr. Domenici (for himself, Mr. Schumer, Mr. Cochran, Mr. Allard, and
Mr. Coleman) introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide the same capital
gains treatment for art and collectibles as for other investment
property and to provide that a deduction equal to fair market value
shall be allowed for charitable contributions of literary, musical,
artistic, or scholarly compositions created by the donor.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Art and Collectibles Capital Gains
Tax Treatment Parity Act''.
SEC. 2. CAPITAL GAINS TREATMENT FOR ART AND COLLECTIBLES.
(a) In General.--Section 1(h) of the Internal Revenue Code of 1986
(relating to maximum capital gains rate) is amended by striking
paragraphs (4) and (5) and inserting the following new paragraphs:
``(4) 28-percent rate gain.--For purposes of this
subsection, the term `28-percent rate gain' means the excess
(if any) of--
``(A) section 1202 gain, over
``(B) the sum of--
``(i) the net short-term capital loss, and
``(ii) the amount of long-term capital loss
carried under section 1212(b)(1)(B) to the
taxable year.
``(5) Reserved.--.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2004.
SEC. 3. CHARITABLE CONTRIBUTIONS OF CERTAIN ITEMS CREATED BY THE
TAXPAYER.
(a) In General.--Subsection (e) of section 170 of the Internal
Revenue Code of 1986 (relating to certain contributions of ordinary
income and capital gain property) is amended by adding at the end the
following new paragraph:
``(7) Special rule for certain contributions of literary,
musical, artistic, or scholarly compositions.--
``(A) In general.--In the case of a qualified
artistic charitable contribution--
``(i) the amount of such contribution taken
into account under this section shall be the
fair market value of the property contributed
(determined at the time of such contribution),
and
``(ii) no reduction in the amount of such
contribution shall be made under paragraph (1).
``(B) Qualified artistic charitable contribution.--
For purposes of this paragraph, the term `qualified
artistic charitable contribution' means a charitable
contribution of any literary, musical, artistic, or
scholarly composition, or similar property, or the
copyright thereon (or both), but only if--
``(i) such property was created by the
personal efforts of the taxpayer making such
contribution no less than 18 months prior to
such contribution,
``(ii) the taxpayer--
``(I) has received a qualified
appraisal of the fair market value of
such property in accordance with the
regulations under this section, and
``(II) attaches to the taxpayer's
income tax return for the taxable year
in which such contribution was made a
copy of such appraisal,
``(iii) the donee is an organization
described in subsection (b)(1)(A),
``(iv) the use of such property by the
donee is related to the purpose or function
constituting the basis for the donee's
exemption under section 501 (or, in the case of
a governmental unit, to any purpose or function
described under section 501(c)),
``(v) the taxpayer receives from the donee
a written statement representing that the
donee's use of the property will be in
accordance with the provisions of clause (iv),
and
``(vi) the written appraisal referred to in
clause (ii) includes evidence of the extent (if
any) to which property created by the personal
efforts of the taxpayer and of the same type as
the donated property is or has been--
``(I) owned, maintained, and
displayed by organizations described in
subsection (b)(1)(A), and
``(II) sold to or exchanged by
persons other than the taxpayer, donee,
or any related person (as defined in
section 465(b)(3)(C)).
``(C) Maximum dollar limitation; no carryover of
increased deduction.--The increase in the deduction
under this section by reason of this paragraph for any
taxable year--
``(i) shall not exceed the artistic
adjusted gross income of the taxpayer for such
taxable year, and
``(ii) shall not be taken into account in
determining the amount which may be carried
from such taxable year under subsection (d).
``(D) Artistic adjusted gross income.--For purposes
of this paragraph, the term `artistic adjusted gross
income' means that portion of the adjusted gross income
of the taxpayer for the taxable year attributable to--
``(i) income from the sale or use of
property created by the personal efforts of the
taxpayer which is of the same type as the
donated property, and
``(ii) income from teaching, lecturing,
performing, or similar activity with respect to
property described in clause (i).
``(E) Paragraph not to apply to certain
contributions.--Subparagraph (A) shall not apply to any
charitable contribution of any letter, memorandum, or
similar property which was written, prepared, or
produced by or for an individual while the individual
is an officer or employee of any person (including any
government agency or instrumentality) unless such
letter, memorandum, or similar property is entirely
personal.
``(F) Copyright treated as separate property for
partial interest rule.--In the case of a qualified
artistic charitable contribution, the tangible
literary, musical, artistic, or scholarly composition,
or similar property and the copyright on such work
shall be treated as separate properties for purposes of
this paragraph and subsection (f)(3).''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made after the date of the enactment of this Act in
taxable years ending after such date.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S6166-6167)
Read twice and referred to the Committee on Finance. (text of measure as introduced: CR S6167-6168)
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