"Oh, it gets so much better than that. They give it away and make money doing so. This information is pretty old, so these loopholes might have closed or changed in some places, but it goes like this:
Step 1: Buy painting for $1 million.
Step 2: Painting appreciates to $2 million.
Step 3: Donate painting to a museum. Museum pays you the $1 million you originally paid for it, so you get your original money back.
The $1 million of appreciation is considered a 'donation,' which is tax deductible so you get to deduct that from your taxable income. This saves you (in the U.S.) 40% of $1 million (or $400,000). In the past, or in other countries, the top tax rate might be as high as 60% or even 90%.
So you get your money back, plus a $400,000 (or $600,000 or $900,000) profit. You don't have to pay capital gains on the appreciation of the painting. You also don't have to pay a broker's fee. Plus, selling a multimillion-dollar work of art can take a long time, and with an auction, there's no guarantee you'd get the appraised price anyway. With an appraisal, you get someone to tell you what the price is. You are paying the appraiser. What do you think the odds are he's going to tell you a price you don't like?
Pretty sweet deal if you ask me." —u/PMMeUrHopesNDreams