Here’s a conversation to have with your CPA after 2016 taxes are put to bed and she has come back from well-needed R&R. The topic is long term capital gains on the sale of art that you’ve held for one year or more. Did you know that art and collectibles are taxed at 28%, unlike long term capital gains on stocks, bonds and real estate. Add to that the health care surtax of 3.8% that applies to net investment income above a certain amount, which includes gains from the sale of art. This is a simple concept that is often overlooked by art collectors today. So much attention is paid to potential savings on estate taxes by making lifetime gifts that the basics are often overlooked. Bottom line, it’s a good idea to compare the transfer tax saving that is achieved by a lifetime gift with the cost of potential capital gains taxes that might be due. What? You don’t know your cost basis?