Can you share some tips on how I can preserve my collection of paintings?

'paintings collection for sale' taxes

• i was asked by a painter to sell their paintings collection (several dozen paintings - life work), what is my title? please give me some links to useful websites, what are the legal things involved in this - papers (what kind of papers? how is it done?) of ownership from painter to collector? if the collector pays 1 million dollars and my comission is %10 - how much of it would be taxes? how much would the painter get? if a percentage goes to a non-profit (how is it done legally? et cetera?) what percentage would be the taxes? besides taxes and ownership papers is there anything else i have to know in this dealing? et cetera, et cetera, et cetera. and give good links (no scholarly research please. quality information rather then quantitiy please). THANKS!

• Answer:

  Hi, Curious ~ What an interesting undertaking! I suspect it will be a challenging and sometimes frustrating experience to sell your artist's paintings. I'll answer your questions, but they may not necessarily be in the order you asked them. 1.) Agent. The relationship you are entering into is as the artist's agent. Law governing your agreement with the artist to sell his product is referred to "agency law". Law.com's legal dictionary defines "agent" as follows: (see: http://dictionary.law.com/ search word agent) "agent n. a person who is authorized to act for another (the agent's principal) through employment, by contract or apparent authority. The importance is that the agent can bind the principal by contract or create liability if he/she causes injury while in the scope of the agency. Who is an agent and what is his/her authority are often difficult and crucial factual issues." 2.) Agreement between agent and artist. As the agent for the artist, problems can arise, so it would be a good idea to written agreement laying out all the terms of the agreement. Without scaring you to death, the following is taken from the Southwest Arts site "How to Hire An Agent" ( http://www.swa.co.uk/info/vac59.htm ) "...it is essential that each party understands each other's position and expectations. A contract needs to be finely tuned to suit each party ... as this sets out the various issues which need to be covered when making a legally-binding arrangement." "Broadly, an agreement must cover the following issues: - Will the agent deal only with selling, or will the arrangement include publicity ... arranging exhibitions or approaching galleries? - Does the agreement apply to all the art work [the artist] currently has available, or are there certain sets or types of work that you wish to exclude? - Does it include licensing copyright to use [the] images and ... control the purposes for which they will be used? The contract might also include "... a specification of the kinds of promotion, ... hiring a gallery or exhibition space" and the geographical area." Please notice in the rest of the page the areas of concern for the artist, and you can easily turn those concerns around and apply them to yourself as agent and whether or not these are going to be a concern." There are several sources of information (and forms) compiled by New York's Volunteer Lawyers for the Arts, which you can find on the Arts Council of Buffalo site, here: http://www.artscouncilbuffalo.org/artist_resources/legal_books.asp Advice on preparing agent agreements and/or choosing an agent mentions expenses involved in selling an artist's work, and which expenses are borne by either party. That is, what expenses are included in an agent's commission, and what expenses will be paid by the artist in addition to the commission. The Scriptwriter article, "All You Need To Know About Agents But Were Afraid To Ask" gives a very good explanation of those considerations. (See Scriptwriter's article, http://www.scriptwritermagazine.com/legal6.htm ) 3.) Provenance - Artist's statement. Transferring ownership to the buyers will require some paper work, especially the artist's statement that he is transferring an original work of art. The Young Artists Gallery site has some excellent forms which are adaptable for your use. The forms are at: http://www.youngartists.com/contract.htm 4.) The commission you earn on selling the artist's paintings are considered income and are taxed as such. For US citizens, the IRS Website ( http://www.irs.gov ) has all the forms and information you will need, whether you operate as a small business sole proprietorship, corporation or some other type of business entity. Information and the forms you would need from the IRS are at: http://www.irs.gov/businesses/small/article/0,,id=99200,00.html A 10% commission on a $1million sale would be $100,000. Small Business Taxes & Management has tax rate tables on that amount here: ( http://www.smbiz.com/sbrl001.html#pis02 ) As you can see from the tables, the tax rates on that amount for a single person would be, $14,625.00 + 30% of the amount over $67,700. The Tax Rate Tables will give you the amounts for other filing status. You didn't say which country or state you reside in, but most governments and states have similar information online for you to estimate the taxes on your sales. 5.) Percentages for non-profit organizations. You didn't indicate who was making a percentage donation to the non-profit agency, you as the agent or the artist from his net profit from the sale. In either case, this would qualify as a deduction to a certain amount (percentage) as a deduction on tax returns. If you are talking about selling a single work for $1million, you are talking large income amounts. Google Answers Researchers do not give legal or professional advice, and the information in this answer is no substitute for careful planning with a tax pro to help you keep as much of your income as possible. Likewise, taking into consideration the amounts you mentioned, the answers here to a question you feel is worth $19.50 are informational only. This informationi was found on the Internet and is general in nature. You have been given some considerations to think about in drafting an agreement with the artist. This is no substitute for consulting an attorney who specializes in agency law who can assure what your formal agreement is what you really think it is. An ounce of prevention now will be far better than a huge disagreement later which can escalate into a major lawsuit, making the lawyers richer, and someone far poorer. Search terms used: agency, agency law arts agent definition: agent forms agent agreements forms arts agent agreements provenance artist's statement of original work commission income tax rates I hope I've at least pointed you in the right direction. Yours ever so, Serenata