Pair inherits $65M sculpture, but can't sell it to pay $29M tax bill

[Taxmancometh]

Pair inherits $65M sculpture, but can't sell it to pay $29M tax bill | Fox News

[Epidemic]

I am sorry but until the art is sold it has no value and as such can not be taxed in my book.

as for selling a bald eagle, I thought most thinst like this were grandfathered. You can sell ivory trinkits... if they are from the 19th century but you are not suppose to be able to buy modern ivory. Why should Bald Eagles be any different.

[Theophylact]

A similar thing happens if, say, I win $100 million in a lottery and have to take the payments over 30 years. But I die during the first year, and my sole heir gets the rest of the winnings. Unlike me, he has to pay the tax up front -- but he doesn't have the money. Can he sell the ticket for anything like its face value? No way. Will the discounted value be enough to pay the tax? Good luck... .

(It's actually a bit more complicated than this. It depends on whose name the ticket was in, whether a trust was set up before the lottery itself, how the will, if any, was written, and lots of other factors, including the rules of the lottery itself, various state laws, and so on. But some really bad outcomes have happened.)

[Chuckiechan]

Well, they can order their art destroyed after death...

De Grazia burned 100 of his paintings:

Ettore DeGrazia - Wikipedia, the free encyclopedia

In 1976, Degrazia engaged in a protest against inheritance taxes based on assessed market values of his work. The artist claimed the U.S. Internal Revenue Service rulings made him "a millionaire on paper and my heirs will have to pay taxes for which there is no money." In his well-publicized protest, Degrazia rode horseback into the Superstition Mountains and burned 100 of his paintings.[1]

There are treasure hunters combing the Superstition Mountains looking for them buried or hidden in a cave or something... Along with the Lost Dutchman Mine...

I think more artists should just destroy their art rather than burden the IRS with additional duties with Obamacare and all...

[Epidemic]

First off since this can not be sold the IRS is incorrect in their valuation of it. There is no arguing that. As such they don't owe the IRS spit for that.

Personally I don't believe for the remaining art that there should be any Taxable value until it is sold. I don't see why a family should have to mortgage their lives to keep a family art collection together. The second they sell a piece then they owe money on that AFAIAC

[Theophylact]

You know it, and I know it, but does the bear know it?

[Taxmancometh]

Don't you just love this fucking taxoholic government?

[tony_j15]

Sundell and Homem, who could not be reached for comment Tuesday, have paid $471 million in federal and state estate taxes related to the collection and have already sold roughly $600 million worth of art to pay those taxes, Lerner told FoxNews.com.

So they've realized a gain of 129 million dollars? Of which they did nothing to deserve, other than hitting a genetic jackpot. I'm having trouble working up any sympathy here.

Personal feelings aside, this is a loophole that does need to be adjusted. The IRS is acting without logic or common sense in this regard, undoubtedly because it (like almost all organizations, corporations, and agencies) acts on bureaucratic dogma instead of creative problem solving. This is one of those odd cases that needs adjusting. Perhaps some duly elected official will sponsor a tax bill amendment to solve this.

[Theophylact]

Mind you, the case at hand is a pretty damn rare one. It isn't often that you have a fabulously valuable asset that's legal for you to own but not to sell.

The only parallel that comes to mind is where you own real estate that can't be developed because of environmental laws. Clearly it's wrong to assess it for tax purposes as though it were prime housing sites. The specific case that I'm thinking of, though, involved a guy who bought the land cheap because the law made it undevelopable, then tried to claim that he was being deprived of the value of his property through an unjustifiable "taking". He lost that one in the Supreme Court.

[Epidemic]

Actually it happens all the time. Grandpa dies and leaves you the family farm. But the irs decides that it is worth a but load of money. Forced by a huge tax bill the family is forced to sell the farm.

[Epidemic]

Grandpa has a four apartments generating a nice living of 4000 dollars a month he is forced to sell off two apartments to cover the bill.

[tony_j15]

Actually it happens all the time. Grandpa dies and leaves you the family farm. But the irs decides that it is worth a but load of money. Forced by a huge tax bill the family is forced to sell the farm.

And is this hypothetical "you" actually interested in taking on the farm? Because otherwise, "you" would probably sell anyway.

When my grandparents died, their houses were sold. All the family had houses and jobs and no one was interested in relocating just to live in the place they grew up in. Can't blame them.

[Bizkitkid2001]

Sell the sculpture on the black-market asking for money up front. Use the money to pay for the taxes, wait a few months before giving the sculpture to the black-market buyer and then report it as "stolen".

Also, don't forget to buy insurance for it so that you can claim the insurance payout as well when it gets "stolen".

Win-win-lose scenario.

[Epidemic]

And is this hypothetical "you" actually interested in taking on the farm? Because otherwise, "you" would probably sell anyway.

When my grandparents died, their houses were sold. All the family had houses and jobs and no one was interested in relocating just to live in the place they grew up in. Can't blame them.

The hypothetical farm of course would be sold because the IRS would force you to do so. However, America has a long history of family farms spanning generations. Now family farms are swallowed by big agribusiness.

I guess you feel it is ok to force these people off the family farms.

of course there is the everpresent problem with you choosing one item to pick apart and ignore the larger picture, there are many estates that the IRS forces people to chop up for parts.

Grampa's construction business worth 10,000,000 in parts that yields a couple of hundred thousand a year in proceeds now costs the heir 3,000,000 to keep alive. Oh well sell it off for parts and fire everyone.

[Taxmancometh]

You have the bloody IRS and then you have imminent domain. Isn't this a great country?

morrisdailyherald.com | Expressway measure could put state in fast lane to grab land in Morris, Illinois

I can't remember the politicians name, but he bought a bunch of land near this proposed highway and is going to make a fortune.

[Taxmancometh]

Dennis Hastert! They called him Hastert the bastard.

[tony_j15]

The hypothetical farm of course would be sold because the IRS would force you to do so.

Uh-huh. And how does the IRS go about doing that?

However, America has a long history of family farms spanning generations. Now family farms are swallowed by big agribusiness.

Because there is little money in it and there are so many other job opportunities. This is not a new phenomenon. It began with the rise of the Industrial Age. But good on you for noticing a 200 year old trend!

I guess you feel it is ok to force these people off the family farms.

You are presenting a vague hypothetical which doesn't actually correspond to reality and only appeals to your grumblings about the IRS.

of course there is the everpresent problem with you choosing one item to pick apart and ignore the larger picture, there are many estates that the IRS forces people to chop up for parts.

Forces? Show me one.

Grampa's construction business worth 10,000,000 in parts that yields a couple of hundred thousand a year in proceeds now costs the heir 3,000,000 to keep alive. Oh well sell it off for parts and fire everyone.

Show me that situation, and I'll show you a dumb business owner who retains an even dumber accountant. It is entirely avoidable via trusts, incorporation, and tax deferrals. You did know you can pay business/estate taxes in installments, right? The IRS will give you up to 14 years to pay on an installment plan.

[Chuckiechan]

Uh-huh. And how does the IRS go about doing that?

What happens as the estate is settled, the tax bill become evident (It's part of the estate, too). So before the estate can be finalized, the tax bill has to be addressed. The family can chip in money and pay it, or they can sell all or part of the entity to raise the money. Or they can rob a bank. The IRS doesn't care where you get the money, just get it.

In farming, you really can't sell off land since you need it to make enough profit to continue. In a business, you can hope to grow back, so if you own some land you can close a branch and sell the land and pay the taxes.

But in farming, the real deal is either the family pays it and runs the farm, or they sell it. And they usually sell it to a large farm corporation because it's clean and simple.

[Epidemic]

And they usually sell it to a large farm corporation because it's clean and simple.

and they sell it because the land is no longer profitable enough for them to make a living with the now 33% smaller farm.

A farm business that used to cover expenses and give a good living wage suddenly becomes 33% smaller and now only pays 77% of a living wage. it still requires the dedication of a full time farming family but can no longer support the farming family.

Tony, lets just admitt the obvious, you don't give a shit about the farmer and lets move on.

[The Real Bingo]

It's another bullshit law passed by a confiscatory, thieving, rotten bureaucracy.

You get taxed on your unrealized gains when you are left with an inheritance and then on capital gains when you sell. So in addition to getting buttf*#%ed by the IRS when you inherited the property, you get buttf*#%ed again because you have to pay capital gains tax when you sell.

Tell me how that's right.