Friday, November 15, 2013
The father and sisters of renowned artist Jean-Michel Basquiat is suing the IRS, claiming it overvalued their colossal collection of his artwork.
After Basquiat’s death in 1988 at age 27, his parents each owned a 50-percent share of their son’s estate. After his mother died intestate in 2008, her share was split evenly between her estranged husband, Gerard Basquiat, and their two daughters. Gerard valued his wife’s half-interest in their son’s estate at $36 million.
The IRS determined her interest is $69 million and claims her family owes an additional $7.3 million in estate taxes as well as nearly $2 million in penalties for late filing and undervaluation. Gerard is claiming the IRS erred in its assessment by disregarding a $58.4 million blockage discount, the legal concept whereby an estate claims a bulk sale would flood the market and significantly depreciate the value of individual pieces.
See James Fanelli, Jean-Michel Basquiat’s Family Tells IRS His Art Is Overvalued, DNAinfo New York, Nov. 11, 2013.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.