Responding to a question put by Edward Winkleman at his blog, I noted last month that the recent Senate bill that would have allowed artists to once again deduct the full fair market value of works they donate to charity was not included in the final bill signed by President Bush in May. In today's New York Sun, Kate Taylor has a good piece on that issue, as well as the efforts to reduce the capital gains rate on sales of art. Before the Tax Reform Act of 1969, an artist received a charitable deduction equal to the market value of the donated work, but since then artists have been able to deduct only the cost of their materials. There've been a number of proposals over the years to restore the deduction, but none has ever stuck.
Prior to the Tax Reform Act of 1997, the top capital gains rate was 28%, which was reduced in 1977 to 20% and then to 15% in 2003 -- but not for "collectibles" (including art), which remain taxed at the 28% rate. The recent Senate bill also dealt with that, reducing the rate to 15%, but that too failed to make it into the final bill.