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Value: $0, Taxes: $40 Million
Commentary Magazine ^ | July 22, 2012 | John Steele Gordon

Posted on 07/24/2012 12:37:23 AM PDT by Altariel

This week’s winner of the you-can’t-make-this-stuff-up contest is undoubtedly a front-page story in this morning’s New York Times. When New York art dealer Ileana Sonnabend died in 2007, she left her children a fabulous collection of modern art valued at $1 billion. Her children have already paid $471 million in estate taxes on the collection, being forced to sell off most of it to meet the bill. (This is a beautiful example, by the way, of why estate taxes should be abolished and replaced with a capital gains tax on inherited assets—the collection, an artistic whole in itself, had to be destroyed to pay the taxes due.)

But there is one item in the collection, a work by Robert Rauschenberg that cannot be sold. It contains a stuffed bald eagle and under the terms of the 1940 Bald and Golden Eagle Protection Act and the 1918 Migratory Bird Act, it is a felony to “possess, sell, purchase, barter, transport, import or export any bald eagle — alive or dead.” The estate, advised by three experts, including one from Christie’s, therefore, valued the work at zero. The IRS decided it was worth $65 million, and is demanding $29.2 million in taxes and $11 million in penalties because the heirs “inaccurately” stated its value.

The trouble, of course, is that the heirs didn’t inaccurately state its value. Anything that cannot, for whatever reason, be sold, is worth zero by economic definition. The value of anything is only what someone else is willing to pay for it. And to pay a dime for this particular artwork would be to commit a federal felony. To sell it for a dime would be to commit a federal felony.

The IRS has an “Art Advisory Panel,” that provides expert advice on the value of art works involved in estates. It was the panel that decided it was worth $65 million. Stephanie Barron, a member of the panel and an art curator at the Los Angeles County Museum of Art, said that, “It’s a stunning work of art and we all just cringed at the idea of saying that this had zero value. It just didn’t make any sense.”

It makes perfect sense and Ms. Barron’s statement is a classic example of the fallacy of the just price, that things have inherent value independent of the marketplace. They may have artistic value, emotional value, religious value, etc. But if they cannot be sold then they have no monetary value because they cannot be converted into money.

The IRS Art Advisory Board, I assume, is made up of art experts. It should add an economist to give the other board members a lesson in economics 101 when necessary. And the IRS should have someone empowered to tell the Bureau, “Are you crazy? This will make us look like idiots, and vindictive idiots at that.”


TOPICS: Miscellaneous
KEYWORDS: baldeagle; irs; taxes

1 posted on 07/24/2012 12:37:29 AM PDT by Altariel
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To: Altariel

I can’t wait till Ted Turner’s family has to settle that scumbag’s estate. Oh wait he probably already had his lawyers take care of that.

If I wanna bequeath anyone anything it will be in a buried mayo jar full of cash/valuables and the only thing I will pass on will be instructions on how to get to it...

Friggin IRS.


2 posted on 07/24/2012 12:44:32 AM PDT by GraceG
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To: Altariel

Then they should deed it over to the IRS and request a ~~~$39 million refund for their overpayment.


3 posted on 07/24/2012 12:48:35 AM PDT by Attention Surplus Disorder (This stuff we're going through now, this is nothing compared to the middle ages.)
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To: Altariel

This proves that the government cannot be responsible for economic growth, but can be responsible for economic destruction. By declaring a Bald Eagle or anyone’s asset or abilities or trades illegal, they can make you and I business-less and value-less.

This is sheer genocide without due process.


4 posted on 07/24/2012 12:51:23 AM PDT by JudgemAll (Democrats Fed. job-security Whorocracy & hate:hypocrites must be gay like us or be tested/crucified)
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To: Altariel

Since owning the damned thing is equally illegal, then the bequeathing was also null and void. It becomes ownerless and can’t be moved either. And certainly does not incur any tax liability.


5 posted on 07/24/2012 12:56:35 AM PDT by HiTech RedNeck (let me ABOs run loose, lew (or is that lou?))
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To: Altariel

It wouldn't be quite the same without the illegal eagle.

6 posted on 07/24/2012 1:31:14 AM PDT by TChad
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To: TChad
“It’s a stunning work of art and we all just cringed at the idea of saying that this had zero value. It just didn’t make any sense.”

They got the "didn't make any sense" part right, on multiple levels.

7 posted on 07/24/2012 1:33:56 AM PDT by norton
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To: HiTech RedNeck

Burn it.


8 posted on 07/24/2012 1:42:52 AM PDT by antceecee (Bless us Father.. have mercy on us and protect us from evil.)
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To: Altariel
The IRS has an “Art Advisory Panel,” that provides expert advice on the value of art works involved in estates. It was the panel that decided it was worth $65 million. Stephanie Barron, a member of the panel and an art curator at the Los Angeles County Museum of Art, said that, “It’s a stunning work of art and we all just cringed at the idea of saying that this had zero value. It just didn’t make any sense.”

I wonder if Ms Barron is as ugly as the work she so highly values?

9 posted on 07/24/2012 1:47:25 AM PDT by cynwoody
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To: TChad

Gack, it looks like something a third grade class might construct, except for the bird. Actually a dead canary would look better on it, I think.


10 posted on 07/24/2012 1:50:16 AM PDT by HiTech RedNeck (let me ABOs run loose, lew (or is that lou?))
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To: cynwoody
I wonder if Ms Barron is as ugly as the work she so highly values?

I'll bet she is on the inside.

11 posted on 07/24/2012 2:01:03 AM PDT by j. earl carter
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To: Altariel

Government only hires the unemployable. It’s the second
tier of welfare. These buffoons on the “Art Advisory Panel”
are totally worthless in the private sector as with most
government workers.


12 posted on 07/24/2012 2:05:57 AM PDT by Slambat (The right to keep and bear arms. Anything one man can carry, drive or pull.)
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To: HiTech RedNeck
Gack, it looks like something a third grade class might construct, except for the bird.

There is a point in a child's life when he discovers the wonders of glue.

"Look, the hamster died, right? We didn't kill it, it just died. So we could have buried it but then Joey got the idea to glue it to a piece of canvas, so it would be, like, art! Isn't that cool?"

13 posted on 07/24/2012 2:16:25 AM PDT by TChad
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To: TChad

Maybe more like stick the hamster in a black painted box glued to the canvas.


14 posted on 07/24/2012 2:38:31 AM PDT by HiTech RedNeck (let me ABOs run loose, lew (or is that lou?))
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To: Slambat

For a long time I felt that government employees were dull because the work dulled them. Now I know that very few would want to have one of those jobs if they could succeed in private enterprise.


15 posted on 07/24/2012 2:41:02 AM PDT by HiTech RedNeck (let me ABOs run loose, lew (or is that lou?))
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To: Altariel

Too bad the bald eagle didn’t catch fire and burn to a heap of ash.


16 posted on 07/24/2012 2:41:54 AM PDT by Navy Patriot (Join the Democrats, it's not Fascism when WE do it, and the Constitution and law mean what WE say.)
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To: HiTech RedNeck

It’s beyond ugly, it’s ghastly. Anyway sounds like an easy case for a good tax attorney. The IRS doesn’t make law, it makes policy, when policy conflicts with law, then it’s the judicial systems job to set thing straight ..... that doesn’t mean that these particular IRS officials aren’t stark raving mad.


17 posted on 07/24/2012 2:42:56 AM PDT by Usagi_yo
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To: Usagi_yo

Yeah... when it goes to court the item will be deemed worthless. Now if in the future Congress eases the restrictions upon eagle carcasses enough to make this piece legal to sell again... then the family might be dinged for capital gains.


18 posted on 07/24/2012 2:48:04 AM PDT by HiTech RedNeck (let me ABOs run loose, lew (or is that lou?))
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To: Usagi_yo

I can sort of see the point the person who constructed this (I won’t say artist) was trying to make. Sort of. But it’s like he or she commissioned a little kid to do it after conceiving of the general idea.


19 posted on 07/24/2012 2:49:46 AM PDT by HiTech RedNeck (let me ABOs run loose, lew (or is that lou?))
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To: Altariel
The IRS is domestic terrorism at its worse.

All who work for or are in any way affiliated with this agency should be shunned by civil society.
20 posted on 07/24/2012 2:51:36 AM PDT by Tainan (Cogito, ergo conservatus sum)
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To: Tainan

How about all the Congresscritters who, over the years, built this monster up layer upon layer with new encrustations of tax code? The IRS is supposed to be there just to administer it. But how do you administer a t*rd???


21 posted on 07/24/2012 2:53:39 AM PDT by HiTech RedNeck (let me ABOs run loose, lew (or is that lou?))
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To: cynwoody

Are those the dingleberries from a buffalo hanging down there?


22 posted on 07/24/2012 2:54:20 AM PDT by Safetgiver ( Islam makes barbarism look genteel.)
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To: cynwoody

That is the ugliest thing in the world... UGH! I would not give you 1¢ for it...
INCLUDING the Eagle.


23 posted on 07/24/2012 3:46:13 AM PDT by Swordmaker (This tag line is a Microsoft insult free zone... but if the insults to Mac users continue...)
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To: cynwoody

Donate that damn thing to the museum and take a CERTIFIED $65 million tax deduction from their taxes! Let’s see the IRS challenge that value!


24 posted on 07/24/2012 3:56:21 AM PDT by Swordmaker (This tag line is a Microsoft insult free zone... but if the insults to Mac users continue...)
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To: Swordmaker

Or insure the thing for $65 million and then wait for an accident........


25 posted on 07/24/2012 4:02:49 AM PDT by plangent
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To: Slambat

“It’s the second tier of welfare.”

Best description of gubbament employees yet penned.


26 posted on 07/24/2012 5:26:43 AM PDT by GladesGuru (In a society predicated upon freedom, it is necessary to examine principles."...the public interest)
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To: GraceG

the super-rich will create trusteeships and other legal means to get out of this. The middle-class will be the ones paying...


27 posted on 07/24/2012 6:17:43 AM PDT by Cronos (**Marriage is about commitment, cohabitation is about convenience.**)
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To: Altariel
The Fed has kept interest rates low in order to stimulate economic activity and spur growth. Monetary policy accepts this as a truism.
The liberal left, I like to call them Debtocrats, will not accept that keeping taxes low will stimulate economic activity and spur economic growth. Fiscal policy is lacking in their conceptualization of truth.
Goose and Gander are both cooked until this can be made clear to the folks.
28 posted on 07/24/2012 6:40:50 AM PDT by outofsalt ("If History teaches us anything it's that history rarely teaches us anything")
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To: Altariel

As a tax preparer, I know exactly what the estate’s process was. When you have an ‘art’ object worth more than $5k, the taxpayer is required to have it appraised and declared at FMV (fair market value). Since this is an illegal eagle art object, there is no FMV other than $0.

Thus this IRS ruling is absurd but since this is the IRS, I repeat myself!


29 posted on 07/24/2012 7:16:27 AM PDT by SES1066 (Government is NOT the reason for my existence!)
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To: Altariel

This seems to be a BS story. I thought that estate taxes have been zero since GW Bush tax cuts? There is something missing to this story or the family just wants sympathy.


30 posted on 07/24/2012 8:55:29 AM PDT by napscoordinator
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To: napscoordinator

Do your home work. The estate tax takes effect after 1.3 million. (or some inflation adjusted number.)

The IRS are vultures.


31 posted on 07/24/2012 9:04:08 AM PDT by Vermont Lt (I just hate our government. All of them. Republican and Democrat.)
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To: Altariel
a fabulous collection of modern art valued at $1 billion

I doubt the whole of modern art is worth even $1 million. (I'd make some exceptions, but 99.9% is pure crap (sometimes quite literally))

32 posted on 07/24/2012 10:09:58 AM PDT by Moltke ("I am Dr. Sonderborg," he said, "and I don't want any nonsense.")
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To: Vermont Lt

The estate tax takes effect after 1.3 million.

Wow...Most Americans have that and more when they pass away. I thought it was everything was non taxed....Homework? What is that? My MBA was done in 2000 and have not looked at a book since....lol


33 posted on 07/24/2012 1:50:05 PM PDT by napscoordinator
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To: Altariel

This is happening to my wife and me. Her mom passed away last August after a 10 year battle with cancer. She was a well-known artist, but never actually sold much... she has a lot in museums all over, has been written about and so on.

She died without much money at all, but left behind a lot of her paintings and lithographs which will take us many years to sell.

It cost us $45K to have the works inventoried, documented, photographed and appraised by and IRS-approved appraiser. My wife and I then had to come up with $245,000 estimated estate taxes for it (we’re still working to get the thing reviewed and signed off on by the IRS).

For years my MIL had been threatening to destroy all her work so she wouldn’t bankrupt the family when she dies. Perhaps she should have done that.


34 posted on 07/24/2012 2:02:10 PM PDT by Cementjungle
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To: cynwoody

Stephanie Barron is chief curator of modern and contemporary art at the Los Angeles County Museum of Art.

35 posted on 07/24/2012 2:08:15 PM PDT by kcvl
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To: napscoordinator
The estate tax takes effect after 1.3 million.

Wow...Most Americans have that and more when they pass away.

The post turtle has nothing on you..........

36 posted on 07/24/2012 2:11:50 PM PDT by Osage Orange (8675309)
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To: Osage Orange

I just find it funny that your liberal friends keep saying that the Bush Tax Cuts were for the rich. 1.3 million is hardly rich today. Heck any idiot who saves from 18 on is going to have that and more. Dear God in Heave I hope you are not dumb enough to have a decent retirement....Sometimes I wonder about your mental faculties but I don’t want you suffering for sure.


37 posted on 07/24/2012 3:01:10 PM PDT by napscoordinator
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To: napscoordinator
Here's what you said......:

The estate tax takes effect after 1.3 million.

Wow...Most Americans have that and more when they pass away.

Well...Naps, most American's don't have 1.3 million when they pass away. So you are totally out of touch there.

And I will make my final point with your incoherent sentence here...

Dear God in Heave I hope you are not dumb enough to have a decent retirement

Like I said...the post turtle has nothing on you. And you prove it over and over...........

38 posted on 07/24/2012 3:15:24 PM PDT by Osage Orange (8675309)
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To: Osage Orange

Wow...I forgot the n after Heaven. And you are full of crap to say that people don’t have 1.3 at the end of their lives. A simple mutual fund and 166 bucks a month from 18 until 70 will EASILY give you a million. You are such a child. Always trying to cause trouble for absolutely NO REASON!!!!


39 posted on 07/24/2012 3:18:07 PM PDT by napscoordinator
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To: napscoordinator
Your incoherent words speak for you...

Once more...this is what YOU said:

The estate tax takes effect after 1.3 million.

Wow...Most Americans have that and more when they pass away.

MOST Americans don't have 1.3 million when they die. You are totally wrong.

And then you post this incoherent post too....

Dear God in Heave I hope you are not dumb enough to have a decent retirement....

And please understand I could careless about your spelling.

40 posted on 07/24/2012 3:50:00 PM PDT by Osage Orange (8675309)
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To: Osage Orange

So we are going to fight over people’s final financial health when they die? Really? Obviously you hang around people who didn’t have a simple plan. I know people who make me look like a pauper. I guess it comes down to principles and who you hang with. I like to hang with responsible people who know they have to prepare for retirement....You? Perhaps not since you feel that people don’t have a large amount of money to keep them from taking government funding. In the end, who cares....Really. You should be trying to help the people you hang with get some responsibility for themselves.


41 posted on 07/24/2012 4:04:10 PM PDT by napscoordinator
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To: napscoordinator
You are a nut case. Period.

You spout wacky stuff...and never back it up.

You've out and out lied about me...Making stuff up to what end...heaven knows.

People call you on stuff you say...and you either ignore it..or deny it.

You've a history here....and YOU talk about responsibility? You've none.

I don't search your posts out...because I know you are nutty. But when I see them I will reply.

42 posted on 07/24/2012 4:24:44 PM PDT by Osage Orange (8675309)
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To: Osage Orange

Dude your the one who comes to my posts everyday. I have never sought you out. You are the problem not me. Sorry you have a crappy life....It is NOT my fault.


43 posted on 07/24/2012 6:05:02 PM PDT by napscoordinator
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To: napscoordinator
Once again...you are wrong.

I don't search your moronic posts out.

Everyday? LOL!!

I run across your wrong headed and dumb ass posts......and I respond to them.

You have an M.O. Many here know it.

Most just think you are looney...and don't counter your goofy posts. I kinda think it's interesting, as to why you are here....So I respond.

44 posted on 07/24/2012 6:55:06 PM PDT by Osage Orange (8675309)
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