Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Wednesday, November 21, 2007

Estate Tax and Art Collections - Examining Stone v. United States


Wendy C. Gerzog  (Professor of Law, University of Baltimore School of Law) has recently posted on SSRN her article entitled Valuing Art in an Estate, discussing the recent district court case of Stone v. United States which illustrates estate tax valuation facts unique to holding artwork.

Here is an excerpt from the introduction to her article:

The estate in Stone possessed a 50 percent undivided interest in 19 paintings. The controversy in the case centered on the value of two Pissarro paintings and on the appropriateness of a discount for the estate’s fractional ownership interest in the collection.

As a result of Lois Stone’s death on September 1, 1999, almost two years after her husband’s demise, their sons Robert and Gary, as trustees and beneficiaries of the J. Ralph and Lois Stone Trust, owned the property in her estate. On the decedent’s timely filed estate tax return, the sons valued her undivided 50 percent interest in 19 pieces of art at $1,420,000, computed by dividing in half the total value of the collection, as appraised by Sotheby’s, and by adjusting that figure with a 44 percent fractional interest discount as advised by FMV Opinions, Inc.


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