I’m pretty sure he’s right in how taxes work. There’s no moment where the value of the painting is realized but you are allowed to deduct the FMV if you make enough and if the donation goes to the charity’s exempt use (which it will if it’s a museum or whatever).

So if you buy painting for a dollar and wait a year then next year you make $3m and the painting is now worth $1m then if you donate it, your AGI is reduced to $3m-min($1m, 30% of income) = $3m-$900k.

You don’t count the appreciation of the painting as income. You don’t even count it as LTCG if you don’t sell it.

I think it also applies to stock option awards. When the startup I was at was acquired some people were talking about it.

There was a subtle mistake: the 30M would be deducted from taxable income (in Canada I was only able to deduct from capital gains)