[adventured]

That doesn't work. That's the great myth of donation tax dodging that isn't actually true, yet is endlessly repeated. You ultimately - at best - only save a fraction of your donated value, you'd be better off just selling the asset instead of donating it for a fractional tax saving.

If that actually worked the top 10% wouldn't be carrying such an outsized share of the nation's tax burden on its shoulders via our very progressive tax system, they'd all be busy dodging all of their taxes via donations.

If you really wanted to avoid taxes, you wouldn't donate anything, you wouldn't sell anything.

The single best way to avoid taxes in your lifetime, is to borrow against your assets and only repay the borrowing in death. Your cost will be interest (interest rates are ridiculously low today). You could go much of your lifetime without paying taxes, while enjoying the good life borrowing against eg your stock holdings. Warren Buffett has made this point numerous times, that if he wanted to avoid paying taxes during his lifetime while enjoying his immense wealth, he'd just use that approach. Buffett could have taken out a $1 billion loan 30 years ago, had fun with that cash, and paid zero taxes on it for decades (while also not selling his primary asset - Berkshire Hathaway stock - which has appreciated dramatically).

[thebean11]

A fraction of the donated value is still much bigger than the actual value you paid for the art. The important part is to get an appraisal far above the actual value.

[fridif]

How does one get an appraisal that the IRS will believe?

[patrickthebold]

The IRS is way understaffed. I imagine they aren't looking too hard.

[fridif]

If you are reporting hundreds of k in donations I'm almost certain you are getting audited, even if it takes them a few years to begin it

[uxp100]

> you'd be better off just selling the asset instead of donating it for a fractional tax saving.

The idea of this scheme (which may be exaggerated on the internet) is that you cannot sell the asset.

This is a painting by the cousin of someone who went to the same barbershop as de Kooning. There is zero market. There are approximately zero buyers. There is some story to be constructed that plausibly justifies some "historical value." There is presumably some decorative value.

[tracedddd]

I keep seeing this discussed, but I have honestly had difficulty getting relatively large loans against assets. All they seemed to care about was income. Yes, Buffet definitely has a better relationship with the bank than I, but I wonder if this is really possible to copy by the average person.