Re:Art's sale value? Zero. The tax bill? $29M
by gamblor956 on Friday July 19, 2019 @02:52PM
(#20481452)
I'm a tax lawyer, dude, I deal with the IRS on a regular basis and have successfully managed an IRS challenge to a client's (sports memorabilia) collective appraisal.
The IRS does not have the right to override an appraisal.
What happened was this: taxpayer valued art at $0 without any supporting evidence. IRS special panel for appraising art (comprised of professional appraisers and art museum curators) valued art at $X million without knowing that it was illegal for taxpayer to own said art (because the law allows museums to own such items). Taxpayer challenged, saying they couldn't actually sell art for any amount, and the IRS agreed and waived the assessment in exchange for the taxpayer relinquishing ownership of illegal item to a museum.
The only reason the kids in this situation even "owned" the art was a special dispensation given to their ancestors--not them--allowing them to "own" the art (a stuffed eagle) while it was in the possession of a museum. The dispensation didn't actually give the ancestors the power to transfer ownership to their children and there was a legal question that it could even be inherited.
The IRS does not have the right to override an appraisal.
What happened was this: taxpayer valued art at $0 without any supporting evidence. IRS special panel for appraising art (comprised of professional appraisers and art museum curators) valued art at $X million without knowing that it was illegal for taxpayer to own said art (because the law allows museums to own such items). Taxpayer challenged, saying they couldn't actually sell art for any amount, and the IRS agreed and waived the assessment in exchange for the taxpayer relinquishing ownership of illegal item to a museum.
The only reason the kids in this situation even "owned" the art was a special dispensation given to their ancestors--not them--allowing them to "own" the art (a stuffed eagle) while it was in the possession of a museum. The dispensation didn't actually give the ancestors the power to transfer ownership to their children and there was a legal question that it could even be inherited.