There are many reasons a private collector would want to loan a work of art to a museum. Museum loans present a philanthropic opportunity for lenders to share their works with the general public in a controlled and safe environment. Additionally, the borrowing museum may provide new scholarly information about the works. Inclusion in a museum exhibition could also bolster an artwork's provenance, potentially increasing the work's monetary value through public exposure.1 Many museums, however, frown upon the sale of a loaned work shortly after an exhibition. These museums often include a provision in their loan agreements that prohibits a sale within a specified period after the close of the exhibition. These periods can range from as short as three months to as long as two years after the conclusion of the loan.
Before loaning a work of art, a potential lender must first consider whether it is appropriate to lend a particular work, taking into account safety and damage concerns. Once these issues are addressed, the potential lender must then determine what should be included in the loan agreement once a work is approved for exhibition.
Preliminary Considerations
As a starting point, a potential lender should determine whether an artwork is sufficiently robust to withstand the stress of travel. Even objects that are stable while not in transit may become vulnerable to damage when moved, and this risk should be carefully assessed. Once travel is deemed safe for a particular work, a conservator should prepare a detailed condition report before the artwork leaves the lender's possession. That way, both the lender and the borrower can determine if the work was damaged while in transit.
The next issue to consider is security, both while the work is on exhibit and while in storage. For example, a lender may want to examine the security cases and/or the location of the objects during the exhibition in relation to the viewing public. It is also a good idea to become familiar with the security systems and protocols in place at the borrowing museum.
Owners should also consider if the loan creates a use tax liability. This tax applies on account of a property's use within a taxing jurisdiction (in contrast to the sales tax, which applies on account of a property's sale within a taxing jurisdiction). For example, if a painting is purchased in State A, and five years later is loaned to a museum in State B, the use of that painting in State B (i.e., its...
