Arts Exchange is "ready to Open its doors." It has been for a while. But the news couldn't be more exciting. The first exchange house for Art will open its doors in France. You will be able to trade shares of Art pieces from the 19th century to the present.
Anyone can go public by offering their Art. It gets pretty complicated just thinking about it. It seems someone will be able to sell shares and at the same time sell the Art to a collector. Who is to say you can't? Who is to track physical ownership? A physical inventory count? An independent audit? These shares sounds like toxic assets already, but it can't be more interesting.
It will probably end up being an eternal auction. How would the US Tax Code treat this? It can treat it as a long term capital gain like the sale of stock or at the tax rate of a collectible at 28%? Interesting. It can be either. It could already become a tax shelter for US collectors. Selling the shares of Art can save you more than a small change compared to selling the Art itself.
I always thought the reason behind the 28% tax rate of collectibles was to penalize black market wires. But New Mexico is pushing for making the collectibles tax rate the same as the long term capital gains to help the Art market. Overall, the tax legislation and the new Art Exchange couldn't be more exciting news for the Art World and probably for the black market "money changers" if 28% was meant to penalize them.
