Do paintings depreciate over time?
What is a "professional artist" and how do you know his or her painting is "worth" a goodly amount of money? Yes, paintings can "depreciate." The price you paid for it has nothing to do with its current market value. Some artists are deemed collectible and command high prices in the marketplace. You will need to have your painting professionally appraised. If it is indeed highly evaluated, now might be a good time to obtain a professional recommendation on proper care of the piece, including possible cleaning, varnishing and/or restoration. A couple chips in the frame have nothing to do with the value of the painting, unless the frame itself is an antique or a work of art with intrinsic value of its own. If the frame is so badly damaged that it no longer provides proper support of the artwork, replace or repair it at once. Appraisals are required by insurance underwriters, but they're just like real estate appraisals. A property is actually worth only what someone is willing to pay for it on the day you wish to sell it. The same is true for works of art.
What are the things that don't depreciate in value?
as a matter of fact, there are a lot of things that doesn't depreciate in value. The longer it gets, the more expensive it goes. Here are those on top of my mind:Classical paintings by famous artistsFurnitures used by historical figuresCenturies old historical manuscriptsVintage Rolex PresidentRare historical and famous automobile models (used by famous celebrities, first edition types) etc.and many more.
What are the list of things that don't depreciate but increase in value?
Well, there isn’t an actual list for these things but we can logically come up with the following.Items that deteriorate technically by use (erosion, wear and tear, spending like gas) normally would not be included in such a list.So, basically items that would have some sort of emotional value, especially those items that are unique or rare might be included. Think a Fabergé-egg or a Rembrandt painting.Other such items include precious metals, albeit that market prices may fluctuate significantly
Can you match a depreciating asset (e.g. car) with an appreciating one (e.g. painting)?
In my mind, there are 2 categories of cars:limited edition, collectible cars that are likely to become classic, collectible and appreciating. These cars will appreciate over time given good preservation and low mileagenormal super cars (e.g. Porsche 911, Ferrari 360, etc.) that have depreciation curves similar to normal cars but since these cars remain attractive for decades, these depreciation curves flatten significantly after the 10 year benchmarkFor category #2, looking at Depreciation curves, looks like a CAGR of -15% to -18% for the first 5 years and then -8% to -10% for years 5-10.So, I guess there must be artists that could have opposite appreciating curves driven by single successful events, i.e. awards, prizes, successful sold out exhibitions, etc.
How does depreciation on real estate work?
Hello, It is great that you are talking about investing in Real Estate and how depreciation affects. As has been pointed out by others on this question, you can depreciate improvements, but you cannot depreciate land. Land will appreciate. When you consider an income property, depreciation is the notional expense that will help you setup reserves for replacing the improvements at the end of life of the asset. It certainly is not a cash expense. But IRS allows you to decrease the income by the amount of depreciation. So it is a great tax play. You can hold on to the cash generated from Depreciation and keep investing it until you need to replace your improvement. So you are using the tax money for no interest and no taxes. When you depreciate the property, the cost basis also reduces. If you were to make additions to a property, the cost of the property would increase. In case you depreciate a property, the cost basis would decrease. When you sell the property, your profit will be the difference of the selling price and the cost basis, not the purchase price. The IRS will then tax you for capital gains based on the appreciation as calculated above. If you closer to San Jose, CA, Pl. feel free to contact me. Disclosure: I am a Licensed Realtor working with Century 21 El Camino in Sunnyvale, CA.
Is spray painting computer wires dangerous?
I was wondering about spray painting computer wired but first of all i wanted to know if its dangerous? Lets say like spray paint all the power supply wires and fan wires the same color with can spray paint. Is this dangerous? Can it cause a fire? Or is it safe to do?
What kind of paintings will you invest in?
To look at art as an investment is to look at art as a commodity. However, a painting does not have inherent "value", the materials to make a painting usually do not cost much (though historically this has not always been the case, when lapis lazuli cost more than gold, and painters had to seek patronage in order to afford the colors they used, this is not true also of art made of gold, gemstones, expensive metals., etc), which means that an artwork's "value" will come from other properties: demand vs supply is a big one, whether or not the artist has recently had a solo retrospective or included in a museum exhibition is another one. So you want to invest in art that will appreciate over time? That would be the Impressionists or the Old Masters. These types of works depreciate very little, and remain stable or gain value over time. But the amount and quality of such works available on the open market is prohibitive for young or new collectors. Of course you could always go the thrift shop route, and look for masterpieces in antique stores, but you would have to become an expert in a particular field: Dutch paintings, tribal masks, Chinese ceramics., etc., etc.. It really depends on how much time you have to spend. But since you're looking to make an investment and make some money off of it during your lifetime, you will probably want to purchase something that appreciates quickly, and which you will be able to sell in a few years, right? The problem here is for such works, the galleries who represent highly sought after artists are not likely to sell to someone who is not an established collector, who they think might hurt the artist's reputation, and who they think is buying the art simply for investment purposes. For unscrupulous buying, you will have to go to the auction market, and there are plenty of websites such as askart, artvalue, and artnet that will show you historical auction data, so you can see how different styles and artists perform on the auction market. Or you can also go to your local gallery and invest in some contemporary art, why? Well because you will be living with these works in your home, and you should invest in what you love. Art buying is a gamble, the contemporary art market is pretty unpredictable which is partly the allure of it. So, visit some artist studios, read up on market trends, study a little art history, and you will be well on your way into starting your art collection.
Can artwork be claimed as a depreciable expense for tax purposes?
Section 32 of Income Tax Act deals with the allowability of depreciation for the purpose of computing income under the head Business Profession and Vocation.As per this Section depreciation is allowed if following 3 conditions are satisfiedCondition one: Certain Assests: Depreciation is not allowed on all assets. It is allowed only in respect ofCertain tangible asstesBuilding,Plant,Machinery orFurniture & FixturesCertain intangible assetsKnow-how,Patent,Copyright,Trademark,Licence,Franchise, orAny other business or commercial right of similar nature.It may be noted that depreciation is not allowed in respect of land, livestock and wasting assets (such as mines).Condition two: Ownership: Assessee must be the owner of the asset.Condition three: Use for Business Purpose: The asset must be used for the business purpose.In your case, in condition one, you can classify artwork as Furniture (10% - allowable depreciation), it is assumed that you've fulfilled condition two relating to ownership.In my opinion condition three i.e. Use for business purpose can be the matter of dispute between you and department depending upon nature of your business. If you can well prove the purpose of business being fulfilled with such artwork than you can claim depreciation thereon.UPDATE1: I further discussed this question with one of my friend his opinion on this question was that since the value of artwork doesn't decline over the period of time being somewhat similar to “Precious articles” (such as jewelry). So depreciation can not be claimed on such artwork.I would further like to add that since I've not YET come across the condition that asset must decline in the value as I've updated above in the Income Tax Act. So you can claim depreciation on artwork subject to fulfillment of “THREE” conditions.UPDATE2: As per section 32 depreciation is allowable on Capital assets. Capital assets are defined in Section 2(14) which clearly excludes “Art work”. So depreciation is not allowable on such artwork.