5 ms·

This is indeed a very common strategy. It is also very commonly caught and detected, and doing so is straightforward. At some point the asset get liquidated.

This is indeed a very common strategy. It is also very commonly caught and detected, and doing so is straightforward. At some point the asset get liquidated. If the appraisal was done in good faith, then the taxpayer has to pay the back taxes without penalties or prejudice. If the appraisal was deliberately manipulated, then there is a strong possibility of criminal charges and fines for evasion. If the article genuinely depreciated in value, then the burden falls on the taxpayer to prove this, and in illiquid markets this is very difficult to establish.

guelo 8y ago
The GOP already took care of that for them: I.R.S. Tax Fraud Cases Plummet After Budget Cuts https://news.ycombinator.com/item?id=18115729 https://news.ycombinator.com/item?id=18115729
- nojvek 8y ago
  The rich got richer and suffocated IRS from being able to touch their $$$$ Something something we are all equal but some are more equal than others.
- masonic 8y ago
  Look at the charts in your own link, spanning 2007-17. Audit rates were increasing under GWB, then plummeted over the course of the Obama administration into 2017.
  - guelo 8y ago
    The Republican congress got serious about attacking the IRS after the fake IRS Tea Party scandal.
    - sosense 8y ago
      Fake scandal? No, that's re-writing history. Obama suggested the IRS target his enemies, mostly conservative groups, and the IRS did exactly that. The only thing fake about it is the news reports calling the scandal "fake."
      - pas 8y ago
        Do you have sources on Obama suggesting that? Otherwise it's just a very baseless claim about an otherwise well documented problem about a few IRS bureaucrats. ( https://en.wikipedia.org/wiki/IRS_targeting_controversy https://en.wikipedia.org/wiki/IRS_targeting_controversy )
        sosense 8y ago
        No, I don't. I should have said Obama Administration, because I don't know from where the order came. That's a good call on your part. I'll see if I can edit. Edit: no I can't edit that post. Obama himself may be guilty only of not placing the best people at the IRS. I argue we should know more about this but don't because "oh, it's fake." ... And because of the deleted evidence.
        masonic 8y ago
        Obama appointees, yes, thanks to discovery pursued by Judicial Watch: http://www.breitbart.com/irs/2017/03/13/fitton-obama-irs-scandal-continues-judicial-watch-forces-irs-disclose-new-documents/ http://www.breitbart.com/irs/2017/03/13/fitton-obama-irs-sca...
  - pas 8y ago
    Look at how the funds requested by Obama got denied by Congress again and again.
    - masonic 8y ago
      The decrease started after the Democrats took sole control of Congress in January 2007 and accelerated while they were still in total control of Congress and the Presidency.
candiodari 8y ago
Why bother getting money back out of charities ? What matters about money is not who owns it but who controls it. As long as the same person has control of the charity, what's the problem ? (and that control is there or they would never be able to sell that illiquit painting)
radiantswirl 8y ago
No offense, but you are dead wrong. Giving to charity is largely a scam for rich people to virtue-signal while profiting from tax evasion. Your assertion that it's difficult to game the system of charitable donations for personal gain is laughable. Your assertion that giving to charity can't be profitable is patently false when you look at the art market, AKA a huge unregulated industry that arguably exists SOLELY to avoid taxes. The art market is unregulated. "Bad-faith" appraisals are the norm, not the exception, because museum directors collude with collectors to inflate the values of artworks donated (tax-free) to their museums, which ostensibly exist for the "public good." LMAO! A museum is just a room full of objects that rich people have used to successfully evade taxes. The only truly impressive thing about the whole charade that is "the art market" is that the world hasn't caught on to the fact that the whole thing is just a tax-evasion scam and none of the big players involved, not artists nor gallerists nor collectors, give a shit about the actual art beyond its utility as a tax-evasion device. The existence of the art market is a strong refutation to your claims. Read up on the art market and then re-read your comments and let me know if you still believe the incorrect information you just wrote.
deleted 8y ago
[deleted]
true_religion 8y ago
Using art as an example of an illiquid market, a piece may be valued at an amount that cannot be realized for 5 years or more, but the current holder just does not want to hold it for that long. The theoretical value does not change even if you buy it for less than that. So charities can and do hold art pieces for years, then sell them at auctions when they know a good buyer is available and interested in benefiting the charity. It may even sell for higher than appraisal just because of competition for the piece, or competition to look as of you are giving the most to charity. After all, no one goes to charity auctions for a good deal.

guelo 8y ago

The GOP already took care of that for them: I.R.S. Tax Fraud Cases Plummet After Budget Cuts https://news.ycombinator.com/item?id=18115729 https://news.ycombinator.com/item?id=18115729

nojvek 8y ago
The rich got richer and suffocated IRS from being able to touch their $$$$ Something something we are all equal but some are more equal than others.
masonic 8y ago
Look at the charts in your own link, spanning 2007-17. Audit rates were increasing under GWB, then plummeted over the course of the Obama administration into 2017.
- guelo 8y ago
  The Republican congress got serious about attacking the IRS after the fake IRS Tea Party scandal.
  - sosense 8y ago
    Fake scandal? No, that's re-writing history. Obama suggested the IRS target his enemies, mostly conservative groups, and the IRS did exactly that. The only thing fake about it is the news reports calling the scandal "fake."
    - pas 8y ago
      Do you have sources on Obama suggesting that? Otherwise it's just a very baseless claim about an otherwise well documented problem about a few IRS bureaucrats. ( https://en.wikipedia.org/wiki/IRS_targeting_controversy https://en.wikipedia.org/wiki/IRS_targeting_controversy )
      - sosense 8y ago
        No, I don't. I should have said Obama Administration, because I don't know from where the order came. That's a good call on your part. I'll see if I can edit. Edit: no I can't edit that post. Obama himself may be guilty only of not placing the best people at the IRS. I argue we should know more about this but don't because "oh, it's fake." ... And because of the deleted evidence.
      - masonic 8y ago
        Obama appointees, yes, thanks to discovery pursued by Judicial Watch: http://www.breitbart.com/irs/2017/03/13/fitton-obama-irs-scandal-continues-judicial-watch-forces-irs-disclose-new-documents/ http://www.breitbart.com/irs/2017/03/13/fitton-obama-irs-sca...
- pas 8y ago
  Look at how the funds requested by Obama got denied by Congress again and again.
  - masonic 8y ago
    The decrease started after the Democrats took sole control of Congress in January 2007 and accelerated while they were still in total control of Congress and the Presidency.

candiodari 8y ago

Why bother getting money back out of charities ? What matters about money is not who owns it but who controls it. As long as the same person has control of the charity, what's the problem ? (and that control is there or they would never be able to sell that illiquit painting)

radiantswirl 8y ago

No offense, but you are dead wrong. Giving to charity is largely a scam for rich people to virtue-signal while profiting from tax evasion. Your assertion that it's difficult to game the system of charitable donations for personal gain is laughable. Your assertion that giving to charity can't be profitable is patently false when you look at the art market, AKA a huge unregulated industry that arguably exists SOLELY to avoid taxes. The art market is unregulated. "Bad-faith" appraisals are the norm, not the exception, because museum directors collude with collectors to inflate the values of artworks donated (tax-free) to their museums, which ostensibly exist for the "public good." LMAO! A museum is just a room full of objects that rich people have used to successfully evade taxes. The only truly impressive thing about the whole charade that is "the art market" is that the world hasn't caught on to the fact that the whole thing is just a tax-evasion scam and none of the big players involved, not artists nor gallerists nor collectors, give a shit about the actual art beyond its utility as a tax-evasion device. The existence of the art market is a strong refutation to your claims. Read up on the art market and then re-read your comments and let me know if you still believe the incorrect information you just wrote.

deleted 8y ago

[deleted]

true_religion 8y ago

Using art as an example of an illiquid market, a piece may be valued at an amount that cannot be realized for 5 years or more, but the current holder just does not want to hold it for that long. The theoretical value does not change even if you buy it for less than that. So charities can and do hold art pieces for years, then sell them at auctions when they know a good buyer is available and interested in benefiting the charity. It may even sell for higher than appraisal just because of competition for the piece, or competition to look as of you are giving the most to charity. After all, no one goes to charity auctions for a good deal.