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Paying rent with your paintings: some romance, some reality

OTHER landlords may complain about their tenants who are late with the rent, but not Jack Klein. He used to lease a loft space to artist Larry Rivers and was able to retire and move to Paris on the paintings his tenant gave him in lieu of rent. It wasn't quite as fast as that: It took Rivers a number of years to go from being a cash-poor struggling artist to becoming a world-renowned figure whose works sell in the five- and six-figure range, but Jack Klein was one of the major beneficiaries of that metamorphosis.

Mr. Klein is not alone. Bartering is probably the oldest kind of economics. On the historical scale, money is the new kid on the block. Artists who are rich in canvases but short on cash have kept bartering alive.

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Accountants, doctors, even grocers, boast works by such big names as Marisol, Willem de Kooning, Robert Rauschenberg, Julian Schnabel, and Andy Warhol which were used to pay their tabs. From the number of works out in the world which are owned by electricians, lawyers, and others, it sometimes seems that many of these artists went for years without ever paying cash.

A lot of people became collectors this way. Sidney Lewis, president of Best & Co., an appliance retailer, has built up a collection of paintings by major and lesser-known artists swapped for washers, dryers, and other appliances. As executors of the estate of David Smith, the sculptor, Clement Greenberg, Ira Lowe, and Robert Motherwell all received small works the artist had done. Various hotels in the Caribbean have some pretty nice art on the walls which cost them only a week or two of expense-paid fun in the sun for the artists.

In general, though, it is doctors and lawyers who do the biggest bartering business with artists. This is partly because their fees are often beyond the reach of most artists' incomes.

Joshua Kaufman's law office is filled with stuff he has accepted from clients in exchange for his services. An entertainment lawyer in Washington, D.C., he has copies of books from author-clients, phonograph albums from recording artist-clients, and tickets for shows from actor-clients, and his walls are covered with paintings - running the gamut from realism to conceptual art - from visual artists.

``I have so many works I have to rotate them,'' Mr. Kaufman said. ``I was thinking once of charging admissions.''

He explained that the problem of which pictures to rotate is probably the least of his concerns when it comes to bartering for art. It can lead to a pretty touchy situation to accept one artist's work but not another's. Certain clients may not feel that they are taken seriously as artists and will doubt the sincerity of the lawyer's efforts on his or her behalf.

Kaufman also noted that there is a ``point where you just can't do it. You can't pay the rent with it or your secretary's salary. If you are in a law firm, how do you explain to your partners that you are taking physical property rather than money which they can all share?''

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Bartered property is also taxable property and, by law, must be declared as such. It can be difficult to bring a work of art to auction or to a dealer, in order for it to be sold, when there is no receipt. Internal Revenue Service agents are instructed to look at the walls of the homes and offices of the people they are auditing and ask where certain works came from. The barter economy exists largely underground, or at least away from government inspection, but the Treasury Department looks closely at how people get what they have.

For those who go by the book and declare the works they have received in barter, the question of how to value the art and pay taxes on it can be troublesome. Many artists who exchange their pieces for services have not sold before, and there are few objective criteria for valuation. It is self-serving for the recipient to pick a low value, which may also upset the artist.

If the artist declares the artwork as payment for legal or other expenses, he or she may value it higher than the lawyer or doctor might. No less than actually purchasing a work of art, bartering often means having to haggle over a price.

The federal government does not acept artwork in exchange for taxes, although this concept has been enacted into law in the state of Maine and was introduced in the Oregon legislature. In France, Picasso's heirs were able to pay off inheritance taxes with the artist's works, but that idea did not get far when it was introduced in the United States Congress in 1980.

Bartering with art may sometimes work to the benefit of the collector, sometimes to the advantage of the artist, depending on the quality of the work and on what happens to the artist's career. Sol Lewitt, a conceptual artist who used to trade works for medical services but now swaps only with other artists for their works, says that ``people get some very good pieces for almost nothing. I think artists are better off when they pay with money.'' But the point in most cases is not the investment potential of the works; rather, it is the generosity of someone who will donate his or her time, labor, or goods and accept something only the artist may see as valuable. The payoff, if there is one, is that much sweeter, since the reward is for one's kindness and humanity.

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