Catherine Posted August 25, 2012 Report Share Posted August 25, 2012 This Is True ( http://www.thisistrue.com free subscription) had a piece on that inherited art problem (can't find the thread - the one where the art piece includes a bald eagle and can't be sold as it breaks Federal law, so heirs say FMV = $0). The tax and penalty the IRS wants is almost $41M -- I'd fight it tooth and nail, too! Quote Link to comment Share on other sites More sharing options...
jainen Posted August 25, 2012 Report Share Posted August 25, 2012 >>can't be sold as it breaks Federal law<< It might seem odd, but there are people who will pay for something that is illegal. Might even pay a premium. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted August 25, 2012 Report Share Posted August 25, 2012 Here is the story Cat is refering to: THE ART OF THE IMPOSSIBLE: "It's a stunning work of art and we all just cringed at the idea of saying that this had zero value," said Stephanie Barron, a member of the Internal Revenue Service panel that appraised Robert Rauschenberg's "Canyon" at $65 million. The people who inherited it said it was worth nothing. "The ruling about the eagle is not something the Art Advisory Panel considered." What eagle and what ruling? Why, the dead bald eagle that's part of the artwork, and the law that says it's a felony to sell one. Tax lawyers say the taxable value of an asset is its market value, and the heirs' lawyer argues that since "Canyon" can't legally be sold, its market value is zero. If the heirs can't get the IRS appraisal overturned, they'll have to pay taxes and penalties of $40.9 million -- even if they donate the artwork. (AC/New York Times) ...What if they give the taxman the bird? Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted August 25, 2012 Report Share Posted August 25, 2012 Government regulations into the "sublime and ridiculous" category! Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted August 26, 2012 Report Share Posted August 26, 2012 Let's face it. the IRS appraisal is wrong. No matter how fantastic the art may be, if the law does not allow it to be sold, then its FMV IS ZERO. FMV means just that, the MARKET value, not the ARTISTIC value. That is why some really stupid, even ugly, stuff has a high FMV, just because the market is willing to pay a lot for it. If someone is willing to pay thousands, for example, for a used baseball that cost a couple of bucks, just because it was hit by a certain person in a certain game, that is it's FMV. 1 Quote Link to comment Share on other sites More sharing options...
jainen Posted August 26, 2012 Report Share Posted August 26, 2012 >>if the law does not allow it to be sold, then its FMV IS ZERO<< If that were true, nobody would be a professional art thief! I mean, suppose I inherited a kilo of cocaine? The law does not allow it to be sold, but its FMV is upwards of twenty grand. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted August 26, 2012 Report Share Posted August 26, 2012 Yeah, but we are not talking about criminals here, Jainen, we are talking about honest taxpayers who are reporting their assets and just asking the IRS to follow the regulations that THEY wrote, and not expect us to pay taxes on the value of an illegal sale. The FAIR in FMV relates to honest sales, not the black market, you know that. I know you are just jerking my chain but you can do better than that. 1 Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted August 26, 2012 Report Share Posted August 26, 2012 <<< suppose I inherited a kilo of cocaine? ...its FMV is upwards of twenty grand.>>>> I don't know how you know that, and I am not sure I want to know why you know that. Tom Hollister, CA Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted August 26, 2012 Report Share Posted August 26, 2012 good one, Tom Quote Link to comment Share on other sites More sharing options...
jainen Posted August 26, 2012 Report Share Posted August 26, 2012 >>how you know that<< Google! Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted December 5, 2012 Report Share Posted December 5, 2012 Final resolution. Not fair, but at least better. http://wealthmanagement.com/taxes/sonnabend-case-settles Quote Link to comment Share on other sites More sharing options...
michaelmars Posted December 6, 2012 Report Share Posted December 6, 2012 didn't Bill Gates say the same thing when he built his house and his property taxes were based on construction costs? He said there is no market value since no one else can afford to build a house like this. Quote Link to comment Share on other sites More sharing options...
Max W Posted December 6, 2012 Report Share Posted December 6, 2012 If the statement about the provenance of the eagle are correct, then it would have been legal to sell the artwork. Legislation making it a felony to sell a bald eagle dates from 1940. However, "The statute explicitly excepts from its scope possession of any bald or golden eagle taken prior to enactment." According to Rauschenberg, the eagle came from the early 1900's. Certainly, with the scientific dating methods available today, the bird's age could have been determined within an acceptable margin of error. Apparently, there are no scientists working at the IRS. 1 Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted December 7, 2012 Report Share Posted December 7, 2012 didn't Bill Gates say the same thing when he built his house and his property taxes were based on construction costs? He said there is no market value since no one else can afford to build a house like this. Shows that Gates does not understand tax law, is all. There is certainly some price at which it would sell, even if that amount is less than he paid to build it that price would certainly not be zero. Quote Link to comment Share on other sites More sharing options...
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