Monday, October 9, 2017
The estate tax, along with divorce and outstanding debts, is among the more notable reasons for collectors to offer up their rare art masterpieces for sacrifice on the auction block. Ileana Sonnabend, a legendary art dealer who passed away in 2007, left bequests to family members that included works by Andy Warhol, Roy Lichtenstein, Cy Twomby, and Jeff Koons. Considered alone, the artwork left in the estate was valued at over $800 million. Closely behind these unique gifts stalked the tax man; Sonnabend’s heirs owed the federal government $331 million and New York State $140 million in taxes. This placed the family in an unpleasant position. Short on funds and heavy on illiquid assets, they were forced to sell a number of these masterpieces in order to satisfy their tax liabilities.
If the Trump administration’s tax plan makes it through Congress, it appears as though the estate tax would no longer be a concern. But, Ramsey Slugg, wealth strategist at U.S. Trust, notes that any repeal would probably be temporary. “The estate tax is kind of like a bad penny. It always comes back. It’s been repealed three or four times before, and it’s come back every time.”
See Eileen Kinsella, Would Donald Trump’s Tax Plan Be a Bonanza for the Art World? An Analysis, artnet news, October 2, 2017.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.