Scheduling a Support Call
Q: How can I schedule a Technical Support Call with Masterworks?
A: You can schedule a call with Masterworks at a time that works best for you! To set up a time regarding any technical issues, please use this link: Schedule Technical Support Call.
Artwork Safety and Insurance
Q: How do you ensure the artwork remains safe? Is the Masterworks Art insured?
A: All of Masterwork's offerings are SEC Qualified under Regulation A+. Additionally, our offerings are insured for damage and authenticity through the syndicate at Lloyd's of London.
Order History
Q: How do I see my Order History?
A: You can see all your historical information on your Masterworks investments on the site or in the mobile app under your Investment History tab. Here is a link that will take you right there: Investment History.
A copy of all legal documentation, including Tax Documents and Purchase Agreements, can also be found here: Your Documents.
Appraisals
Q: When does Masterworks perform appraisals on paintings?
A: Masterworks performs appraisals on offerings completed between six months and one year prior to the report date and for which no public auction comparable sale has occurred. The 'fair market value' of the artwork is deemed to be equal to the aggregate offering price.
In simpler terms: Masterworks will only issue appraisals for offerings where there has been a recent comparable sale.
Estate Planning and Beneficiaries
Q: What happens in the event that I die or pass away? Can I set up an Entity, Trust, or Beneficiary?
A: As investments are considered physical property, they will be included in your estate in the event of your passing. Alternatively, you can designate a beneficiary on your Masterworks account by heading to the Entities section, selecting Joint Account then Rights of Survivorship. This will mean that 50% of the shares will be in your name and 50% in your beneficiary's name. Upon your passing, the remaining shares will be transferred to your joint account holder.
Minimum Investment
Q: What is the minimum I have to invest in a Masterworks painting?
A: Per the SEC filing, there is a $15,000 minimum investment per painting. However, Masterworks can waive that on a case-by-case basis based primarily on portfolio size, liquidity needs, and risk tolerance.
You can schedule a time with one of our advisors here: Schedule a Meeting with an Advisor.
They will be able to answer any questions you might have about investing on our platform and discuss minimum payments based on your specific financial circumstances.
Account Security
Q: I think someone is trying to access or hack my Masterworks account, how can I secure it?
A: As a precaution, please change your password here: Reset Password and make sure to Enable 2FA on your account.
This can be done by updating your Security Settings.
As a first step, please verify your email. Once that is complete, you can set up two-factor authentication.
That will add additional security to your account, and will help to prevent anyone from being able to access your account.
Portfolio Performance
Q: I am not happy with how my investments are doing, can I speak to someone about my portfolio performance? Why are my investments going down in value?
A: Masterworks performs appraisals on offerings completed between six-months and one-year prior to the report date and for which no public auction comparable sale has occurred, the ‘fair market value’ of the artwork (as defined under the IRS Code) is deemed to be equal to the aggregate offering price, which represents the price at which an investment in the artwork was sold to investors. In plainer terms: Masterworks will only issue appraisals for offerings where there has been a recent comparable sale.
Management Fees
Q: What are management fees and can you explain management fees?
A: The Management fees are earned in equity shares. The number of shares we earn is 1.5% of the total shares outstanding each year. This means we earn a set number of shares irrespective of any value given to those shares.
For US tax purposes, we must apply the NAV price to the shares in order to figure the tax deduction, this is beneficial to you because you get a greater deduction. For the avoidance of doubt, the NAV of the shares does NOT change the number of shares paid to Masterworks.
Masterworks Wallet
Q: What is the Masterworks Wallet?
A: The Masterworks wallet is a useful tool for Masterworks members.
Not only will the wallet allow an investor to trade on the secondary market, the wallet also provides an efficient way for our team to distribute funds associated with payouts back to our investors.
That way the investor has the autonomy to decide whether or not they want to reinvest those funds are have them withdrawn to a bank account of their choosing.
Selling Artwork with Masterworks
Q: Can I sell my painting with Masterworks? I am interested in selling my art with Masterworks, can you give me more information please?
A: All of the information regarding acquisitions can be found here: Sell with Masterworks.
Funding Timeline
Q: How long does it take Masterworks to fully fund a painting? What is the funding timeline?
A: Funding timelines for Masterworks will vary on a number of different factors including, but not limited to:
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Offering size (i.e. the number of shares issued for each offering)
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Popularity/ familiarity of artist for investors
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Availability to first time investors
Physical Art Gallery
Q: Does Masterworks have a physical art gallery that we can visit?
A: Here is the link to the gallery where we have our pieces on display: Level & Co Gallery. It is by appointment only, so please schedule a time using the link on the top right corner of that website page.
Payout Fee Structure
Q: What is the Payout Fee Structure?
A: There is a 1.5% management fee that is taken out on an annual basis. There is a second fee that occurs once an offering has been sold. That second fee comes out at 20% of that final sale profit. Both of those fees occur at the point of liquidation. With that in mind, we do take our fees in the form of equity, which means no out of pocket fees for you!
To break that down further, Masterworks issues an additional 1.5% of shares each year to the offering. So for example of a full 10 year old, we end up taking less than 15% of the total offering after a 10 year hold.
For Example:
If Total Shares at IPO = 1000
Then year 1 shares = 1000*(1.015^(1)) = 1015
Then year 10 shares = 1000*(1.015^(10)) = 1160.54
MW owns 160.54 of the total in year 10 160.54/116054 = 13.83%
This is because we retroactively dilute our own shares each year when we issue new shares. Using this example, in year 10 we had to add 17 shares to earn 1.5% of the painting, but the first year we only issued ourselves 15 shares, which in year 10 do not represent 1.5% of the painting.
Painting Sale Dates
Q: Why can't I see the exact date a Masterworks painting was sold?
A: The details of the purchases are often between us and private buyers that request anonymity, mixed with the long process of ownership transfer and SEC regulations. Therefore, the exact date of sale becomes somewhat subjective.
Trading Alto Shares
Q: Can I trade my Alto Shares?
A: Investments made through an IRA will not be eligible to trade on the Secondary Market, as those investments are made with funds that enjoy beneficial tax treatment, sale of those shares would often represent an unqualified distribution and subject to penalty. At this time, selling the shares on the Secondary Market is the only way to liquidate your position outside of Masterworks selling the work. However, there is a process for getting these shares eligible to trade, however I do want to warn that it will create a taxable event, and there may be additional fees that AltoIRA might apply.
The first thing you would need to do is reach out to AltoIRA support and request an "In-Kind" transfer. What that process is doing is requesting that AltoIRA releases the Custody of the Masterworks shares over to you as an individual. Once that is complete, you will need to provide us with the form that they will send you as a confirmation.
Once we have that form, our team will need to reach out to AltoIRA to get those shares back into your Masterworks account, which would put them under our Custody. Once they are settled back into our custody, you will need to set up a Trading Account with our partners at Templum, which will give you access to the Secondary Market. Once that wallet is approved, those shares are then sent to Templum for custody.
Once the shares are uploaded into the Approved Wallet, you can post them as Sell orders on the Secondary Market. Keep in mind that we have no control over those prices, as they are dictated by what someone is willing to purchase the shares for. Once those shares sell, that money will be deposited into your Trading Wallet, where you can then link it directly to a bank account, which can be used to send the funds via ACH transfer.
If this is something that you are interested in doing, you will need to start with AltoIRA support to request that "In-Kind" transfer. Please note, this entire process can take up to a month or so.
Secondary Market Prices
Q: Why is the secondary market price so low? Can you explain the secondary market price?
A: The secondary market does require both a third-party buyer and a seller. As such, the value of the shares you are looking to sell are tied directly to what someone is willing to pay for them. This does create a difference in the appraisal value and the secondary market value. When you originally invested with us, you paid at the appraisal value of $20 a share. The value of your shares in your Masterworks portfolio will correlate to our appraisal processes, whereas, the value in your trading account will fluctuate between that buyer and seller relationship.
With all that being said, it is completely up to you to choose when to sell, but if it is before Masterworks sells the piece, you will be bound to that secondary market value; many investors use the "Last Trade Price" as a reference to determine that value. Keep in mind that the lower you decide to sell your shares for, the more likely a potential buyer will purchase them.
Portfolio Status
Q: What does Early Days, Stabilized, Exited, mean in my portfolio?
A: We have three tiers for a work that is being held:
- Early Days: 0-1 year of holding
- Stabilizing: 2-10 years of holding
- Exited: Work has been successfully sold
These really don't mean anything for your investment aside from time having passed.
Selling Paintings
Q: When will Masterworks sell my painting?
A: Based on research and market data, an average sale horizon for similar works to those owned by Masterworks is between 3-10 years. However, the last several pieces sold by Masterworks were held for under 3 years. Past performance is not indicative of future results.
Diversified Art Portfolio (DAP)
Q: Can I sell my Diversified Art Portfolio (DAP) shares?
A: The Diversified Art Portfolio has a 24-month lock-up period before you can request a redemption. You will be able to make your first redemption after the lock-up period. When eligible, you will receive a redemption form within your Masterworks account.
Changing Email Address
Q: I would like to change my email address on my Masterworks Account, but I am unable to when I go to settings?
A: We will need to confirm your identity first before making this change. When you reach out to Support, please send the answers to the following prompts:
- Date of birth:
- Last 4 of SSN:
- Most recent investment:
- Existing email & email you would like to update your account to
International Investors
Q: I am an international investor and I would like to set up my Masterworks Wallet to use the secondary market, can I set it up?
A: Unfortunately, the Masterworks platform is bound by the rules every individual country employs regarding securities. Due to these restrictions, we are currently not able to offer our Secondary Market trading platform, which is the only way to liquidate your Masterworks position outside of a sale of the work by Masterworks. So at this time, we are unable to accommodate liquidation of your Masterworks positions using the Secondary Market.
Receiving Payouts
Q: How do I receive Payouts?
A: When Masterworks sells the work you are invested in, there are several way that you can receive your Payout:
- If you have set up your Masterworks Trading Wallet, the funds will automatically be deposited into your wallet as Available Funds. With these funds, you can then re-invest into another offering or withdraw the funds to any of your linked bank accounts on file.
- If you paid via an ACH transfer using a linked bank account and you do not have an open trading wallet, we will send those funds directly back to your linked account via ACH transfer.
- You can also request to have us send you a wire transfer or a physical check to the address we have on file.
Please note, when you have an upcoming payout, you will receive an email from our team letting you know that you that it is on its way! This will also include a link that will ask you to verify your details to make sure we get your funds to you without any issue.
K3 Tax Documents
Q: Why is my K3 Tax Missing Pages?
A: For your convenience, Masterworks only included pages in your K1 which are relevant to your filing. Since information on those pages are not applicable they were intentionally left out of your K-1 package.
If you are preparing your own taxes, leave blank any fields that reference omitted pages.
Legal Name Change
Q: I changed my legal name, how can I update it on my Masterworks account?
A: To process your name change request, please reach out to Support and provide:
- Updated government-issued ID
- Certificate of name change (e.g., court order, amended birth certificate, marriage certificate, divorce papers, etc.)
- Updated Full Name
Selling Shares on Secondary Market
Q: How do I sell my shares on the secondary market?
A: Follow these steps to post a Sell order for your shares on the Trading platform:
- Go to the Trading Dashboard
- Toggle the "Shares Eligible to Trade" on
- Select the offering you wish to trade
- Click "Sell" in the pop-up window
- Enter your sell order
Sharpe Ratio
Q: What is a Sharpe Ratio?
A: Please click here to watch a short video about the Sharpe Ratio!
Investments are often compared through risk-adjusted appreciation, which is measured using the appreciation rate as well as the volatility of that investment. This is typically referred to as a “Sharpe Ratio.” Volatility represents the variation in the historical returns or appreciation of an asset class over a set period of time. Higher volatility generally means more risk, and lower volatility generally means less risk.
Sharpe Ratio: Reflects the average annualized artist market appreciation or depreciation of repeat sales at public auction for a specific artist (paintings only) minus the risk-free rate, divided by the volatility (as measured by standard deviation) of those returns in that artist's market. For any particular artist market, this reflects a time range of the earliest purchase price date for all repeat sales, ending on the last sale date for that artist for their repeat sales.
All-Art: Reflects the average of the annual returns across the time period relative to the selected artist market (not beginning earlier than 12/31/1990) minus the risk-free rate, divided by the volatility (as measured by standard deviation) of those returns. The Masterworks Repeat-Sale Pair Index of All Art is calculated using Standard & Poor’s CoreLogic Case-Shiller Home Price Indices Methodology.
S&P: Reflects the average of the annual returns across the time period relative to the selected artist market (not beginning earlier than 12/31/1990) minus the risk-free rate divided by the volatility (as measured by standard deviation) of those returns.