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Abstract: 

In a thriving art market, investors making changes to their collections understandably might want to save tax dollars by structuring like-kind exchanges. But the lack of specific guidance regarding the definition of like-kind art and other collectibles--and the unusual nature of collectibles transactions--clouds the applicability of Section 1031 to such arrangements. This article suggests that tax advisors can create structures that will help such transactions come within the qualified intermediary safe harbor, while keeping in mind that almost any position an owner takes with respect to like kind art or other collectibles is subject to challenge.

Keywords: IRC Sec. 1031; like-kind exchange; art exchanges; like-kind art; exchanges of collectibles; use requirement; qualified intermediary safe harbor

Affiliations:  1: Brooklyn Law School.