The last requirement may be the easiest to fulfill. The IRS deems a "qualified appraiser" as someone "qualified" and leaves the definition at that.

Beyond the rules set by the IRS to make a qualified donation, which any person of means could abide by with proper counsel, a looser problem appears: how to keep the work in plain view. Art, after all, is likely acquired to be seen. And an owner likely bought a work to see at his or her discretion.

To retain ownership, some collectors have taken to setting up their own museums and private foundations. When this is done by the book, it can provide a neat accommodation for both tax purposes and viewing purposes alike.

The IRS rules say that if there is a separate structure at a residence dedicated to exhibiting art and it is open to the public, the collector can claim tax-exempt status. Lerner suggested this tactic for a client who lived in a large estate in Bedford, N.Y. "We closed off a part of the house and built a separate entrance," he says. "Then we put all of the art in there and loaned out some. This satisfied all the IRS requirements." And, of course, the collector could stroll over and take a gander at his artwork anytime.

Artists themselves have similar crucibles when it comes to the handling and ownership of their art. Increasingly, artists' foundations are being formed. The number of artist-endowed foundations has grown rapidly in the past 15 years, according to a study, "The Artist as Philanthropist," conducted by the Aspen Institute. Three hundred such foundations now operate around the country.

"It's very important for artists to set something up when they are alive," says John Sare, a partner in the tax-exempt organizations practice and the trusts and estates group of Patterson Belknap Webb & Tyler LLP in New York City. He says this because there are many cases in which a famous artist's work has fallen into the "wrong" hands because the artist failed to create an organization to direct his work's use and/or exhibition-or, for that matter, the use of funds-when he or she was alive. (The $230 million Andy Warhol Foundation for the Visual Arts fell into legal dispute over such estate clauses and instructions.)

To be sure, the entire foundation thing is complex because there are different types of foundations and different types of conditions.

Survivorship is a key issue for donors deciding whether to form a foundation; 60% of artist foundations holding assets of $1 million or more are associated with artists who were not survived by children, and 40% are associated with artists who had no immediate survivors, according to the Aspen Institute study. That's likely because there is a 100% federal estate tax marital deduction, which serves to delay or even eliminate the need for the formation of foundations among those artists with surviving spouses, says the institute's Christine Vincent.

Interestingly, sometimes both artists and collectors try to donate a fraction of a work of art in an attempt to retain ownership and claim a deduction while they are alive. This doesn't mean breaking out the scissors. Rather, it means valuing a fractional interest in the art. And it usually doesn't work. 

In any event, while beauty may be in the eye of the beholder, value is in the hands of the tax man. And one way to take art out of his hands is to donate it to a foundation. That is, while the artist or collector is still breathing.

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