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Friday, September 20, 2013

Who Tells the IRS How Much Art Is Worth?

Posted by on Fri, Sep 20, 2013 at 2:53 PM

A powerful group of art-world volunteers, first assembled in 1968, are the ones who decide how much charitable deductions a museum donor pays, and how much estate tax is assessed on art.

They meet twice a year, and post their reports, including their names, in reports available online. (Here's FY 2012; there were 19 members.)

At their meetings, the experts consider each work and the taxpayer's appraisal without knowing whether it's for a donation or an estate. Then they offer their consensus, which—no surprise here—often runs counter to taxpayers', though not as often as you might think. Last year, the panel agreed with the taxpayers 51 percent of the time, in fact. At the same time, it also raised the values of 171 artworks in estates by two-thirds.

 

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1
And this group is highly dependent upon the super-rich, who make up their customer base, and various and sundry foundations endowed by that super-rich.

Why is this important? Because one of the chief ways to avoid paying federal taxes, and to make a profit from tax-off situations, is to purchase a work of art at, say, $100,000, then donate it to a museum claiming a valuation of $1 million, and deduct a hefty chunk of that from taxes, thereby in reality reaping a profit from said transaction.
Posted by sgt_doom on September 20, 2013 at 3:46 PM · Report this
Dr_Awesome 2
@1 Curious, and plausible-sounding.
Got any sources, tinfoil-hat-man?
Posted by Dr_Awesome on September 20, 2013 at 7:18 PM · Report this

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