Posted on 07/24/2012 8:29:01 AM PDT by SeekAndFind
That's one way to increase tax revenue from the rich. If you can't get Congress to pass the Buffett Rule, why not just start taxing phantom income instead?
They want their money, even if you don't get yours.
The object under discussion is “Canyon,” a masterwork of 20th-century art created by Robert Rauschenberg that Sonnabend’s children inherited when she died in 2007.
Because the work, a sculptural combine, includes a stuffed bald eagle, a bird under federal protection, the heirs would be committing a felony if they ever tried to sell it. So their appraisers have valued the work at zero. But the IRS takes a different view. It has appraised “Canyon” at $65 million and is demanding that the owners pay $29.2 million in taxes...
While art lovers may appreciate the IRS’ aesthetic sensibilities, some estate planners, tax lawyers and collectors are alarmed at the agency’s position, arguing the case could upend the standard practice of valuing assets according to their sale in a normal market. IRS guidelines say that in figuring an item’s fair market value, taxpayers should “include any restrictions, understandings, or covenants limiting the use or disposition of the property.”
The owners inherited a cool $1 billion in art from their mother but have had to sell nearly $600 million worth to cover the federal and estate taxes. As for the eagle, they can either (a) keep it and come up with $29 million, (b) sell it and go to jail for that, (c) refuse to pay the tax and go to jail for that, or (d) accept the feds' valuation and come up with the $29 million, then donate the sculpture to charity and take a relatively small charitable deduction every year for the next … 75 years. I’m honestly curious to see if the IRS backs down now that there’s been some media attention to this or if they figure, as their boss does, that the public’s sufficiently hostile to rich people that they can play hardball here by demanding a tax on an asset that can’t legally generate income. Which way are we betting? Let me know in the comments!
I'd take it to the tax auditor's office and invite some Interior Department folks with me to instantly arrest the agent for "possession".
If the IRS can do this, they could also conceivably hit you with a tax bill of what they think your lifetime income will probably be and charge you accordingly.
So who was it that said the Rich don’t pay enough in taxes?
There is an option E: Fight it in court.
Donate it to a museum at the IRS’s assessed value, and take the tax deduction.
The IRS will become the new Gestapo. Perhaps Obama should get them black uniforms.
There is an option E: Fight it in court.
And use the last 400 million on lawyers...No thanks. If they feel that the item is a family treasure than pay the 29 million and keep it in the family. If not donate it and use the tax write off for 75 years. I think unless I really loved the item, I would take the write off....I wonder if it would go to future generations (75 years)????
—And use the last 400 million on lawyers...—
Why would it cost that much?
If it would, then this is basically an IRS shakedown.
Why, of course they don't! The IRS is letting them keep what, $400 million?! Doesn't that sound like an outrageous amount of money? Even at a 60% plus rate, they're obviously not being taxed enough. :-/
RE: There is an option E: Fight it in court.
With guys like John Roberts now on the other side of the fence, I’m not so sure this will amount to anything.
Or - have some catastrophe destroy the sculpture and claim a loss of the IRS’s assessed value.
If it would, then this is basically an IRS shakedown.
Wouldn’t surprise me in the least.
They could leave it in the back of a truck in a parking lot and allow it to be stolen.
You didn’t read about how the donation would have to amortized.
Ugh. Before our hearts bleed any more for these rich inheritors of artsy-fartsy garbage...are they progessive Democrats? Are they really getting exactly what they deserve?
Ugly as a mud fence!
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