6 ms·

Sounds like the IRS was trying to encourage/strongarm the owners to charitably contribute the piece to a museum by offering them a fat deduction. Yay. (Probably

by flomo 7y ago

Sounds like the IRS was trying to encourage/strongarm the owners to charitably contribute the piece to a museum by offering them a fat deduction. Yay. (Probably would have better to have this unsalable art owned by the American people in the Smithsonian or somewhere, but good enough.)

close04 7y ago
> by offering them a fat deduction A deduction from a number that they "invented". If appraisers (and basically the market) say the value is 0 but the IRS says it's $65 million who is right? What if you have a regular piece of art that's appraised at say $1 million but the IRS says it's $1 billion? It appears the IRS's evaluation always stands. If so it's a perfect method to strong-arm at will. > Last fall, the agency sent the family an unsigned draft report that it was valuing “Canyon” at $15 million. After Mr. Lerner replied that the children were refusing to pay, the I.R.S. then sent a formal Notice of Deficiency in October saying it had increased the valuation to $65 million. And the strong-arming.
- Simon_says 7y ago
  I say let the IRS put any value they want on it, but then give the owner an option to sell it to the IRS at that price that the IRS can’t refuse.
  - Ensorceled 7y ago
    Heck, even at a 10% discount. e.g. the IRS claims this is worth $65 million so there is an explicit offer to buy at $58.5 million and the IRS can make a bundle on the taxes and then on selling it for its "real" value.
  - asveikau 7y ago
    If I take that to its logical conclusion: do you believe the IRS should be expected to have the funds to purchase every conceivable asset at market price?
    - dannyw 7y ago
      That is a stretch, but let’s say there’s a 20% discount to account for transactional costs and risk loading. If someone is willing to take a 20% loss on “market value”, that market is not market value.
      - asveikau 7y ago
        I don't think you see my point. IRS cannot be compelled to pay 80% price on every conceivable asset. It's like telling any appraiser... Yeah you think it's worth that much? Prove it! Buy the sucker! If you did that multiple times they would go bankrupt, because sure they may be able to resell the thing if priced correctly but they need to pay for it in the first place. And to do it at the scale of IRS ... It's not a reasonable request or expectation.
        MegaButts 7y ago
        But isn't it only a problem when there is a significant discrepancy between the market value and the IRS appraisal? Obviously the IRS doesn't have the funds to buy the entire market, but if people own something that's actually market value why would they sell it at a significant discount? Also you're taking a gamble by challenging the IRS to buy something at a discount that they won't actually call your bluff and you lose out on money. And if you're actually standing by your personal assessment over theirs, you either make money or you get to skip the tax bill. This seems like a much better balance than what we currently have.
        ghostbrainalpha 7y ago
        As long as the IRS was given a sufficient window to pay for the item it would still work. There is no reason for them to have to pay up front. If they can't sell the asset and then return 80% of it's market value to the original owner over the course of a year, than they were probably wrong about the market value. Of course there are certain items that may take longer than a year to find the right buyer, mega yachts, specialized works of art, but if these things take years to sell and find the right buyer than their potential market value should be reduced to reflect that.
  - asfuoepfasdio 7y ago
    That would lead to unscrupulous people at the IRS valuing their friends junk as worth millions for a kickback.
- coldpie 7y ago
  Oh no, those poor millionaires.
  - mensetmanusman 7y ago
    People fear the day the authorities proclaim their property to be 10x the value from yesterday.
    - coldpie 7y ago
      If someone is in a situation where their property's valuation cannot be evaluated by the sale of similar objects on the market, then they are without exception able to afford to pay the taxes on it. The story discussed here applies only to the extremely wealthy, and such people don't deserve any pity for having to contribute back to the society that allowed them to accumulate such wealth.
      - close04 7y ago
        What happens when it doesn't involve a [mb]illionaire but regular people?
        coldpie 7y ago
        How do you imagine a non-[mb]illionaire would find themself in this situation?
        close04 7y ago
        In the situation of dealing with the IRS for any kind of inheritance they have to pay taxes for? Or actually anything they own if it turns out the IRS can simply have it's own estimation of value and taxes based on that? If the IRS can just blurt out their own evaluation overriding any independent appraiser, even bump it up 300+% between draft and final evaluation, and tax you based on it then yes I do see quite a few people in this situation. I'll try to assume the best interpretation of what you wanted to say and guess that maybe you didn't think that if the IRS can do this for a $1bn inheritance (than can or cannot be sold) they can also do it for a $100 inheritance. It's the principle of them being allowed to make the authoritative appraisal (not their job) that's the issue here, not that they collect taxes (their job).
zaroth 7y ago
What makes you think they got to take the deduction?

by flomo 7y ago

close04 7y ago

> by offering them a fat deduction A deduction from a number that they "invented". If appraisers (and basically the market) say the value is 0 but the IRS says it's $65 million who is right? What if you have a regular piece of art that's appraised at say $1 million but the IRS says it's $1 billion? It appears the IRS's evaluation always stands. If so it's a perfect method to strong-arm at will. > Last fall, the agency sent the family an unsigned draft report that it was valuing “Canyon” at $15 million. After Mr. Lerner replied that the children were refusing to pay, the I.R.S. then sent a formal Notice of Deficiency in October saying it had increased the valuation to $65 million. And the strong-arming.

Simon_says 7y ago
I say let the IRS put any value they want on it, but then give the owner an option to sell it to the IRS at that price that the IRS can’t refuse.
- Ensorceled 7y ago
  Heck, even at a 10% discount. e.g. the IRS claims this is worth $65 million so there is an explicit offer to buy at $58.5 million and the IRS can make a bundle on the taxes and then on selling it for its "real" value.
- asveikau 7y ago
  If I take that to its logical conclusion: do you believe the IRS should be expected to have the funds to purchase every conceivable asset at market price?
  - dannyw 7y ago
    That is a stretch, but let’s say there’s a 20% discount to account for transactional costs and risk loading. If someone is willing to take a 20% loss on “market value”, that market is not market value.
    - asveikau 7y ago
      I don't think you see my point. IRS cannot be compelled to pay 80% price on every conceivable asset. It's like telling any appraiser... Yeah you think it's worth that much? Prove it! Buy the sucker! If you did that multiple times they would go bankrupt, because sure they may be able to resell the thing if priced correctly but they need to pay for it in the first place. And to do it at the scale of IRS ... It's not a reasonable request or expectation.
      - MegaButts 7y ago
        But isn't it only a problem when there is a significant discrepancy between the market value and the IRS appraisal? Obviously the IRS doesn't have the funds to buy the entire market, but if people own something that's actually market value why would they sell it at a significant discount? Also you're taking a gamble by challenging the IRS to buy something at a discount that they won't actually call your bluff and you lose out on money. And if you're actually standing by your personal assessment over theirs, you either make money or you get to skip the tax bill. This seems like a much better balance than what we currently have.
      - ghostbrainalpha 7y ago
        As long as the IRS was given a sufficient window to pay for the item it would still work. There is no reason for them to have to pay up front. If they can't sell the asset and then return 80% of it's market value to the original owner over the course of a year, than they were probably wrong about the market value. Of course there are certain items that may take longer than a year to find the right buyer, mega yachts, specialized works of art, but if these things take years to sell and find the right buyer than their potential market value should be reduced to reflect that.
- asfuoepfasdio 7y ago
  That would lead to unscrupulous people at the IRS valuing their friends junk as worth millions for a kickback.
coldpie 7y ago
Oh no, those poor millionaires.
- mensetmanusman 7y ago
  People fear the day the authorities proclaim their property to be 10x the value from yesterday.
  - coldpie 7y ago
    If someone is in a situation where their property's valuation cannot be evaluated by the sale of similar objects on the market, then they are without exception able to afford to pay the taxes on it. The story discussed here applies only to the extremely wealthy, and such people don't deserve any pity for having to contribute back to the society that allowed them to accumulate such wealth.
    - close04 7y ago
      What happens when it doesn't involve a [mb]illionaire but regular people?
      - coldpie 7y ago
        How do you imagine a non-[mb]illionaire would find themself in this situation?
        close04 7y ago
        In the situation of dealing with the IRS for any kind of inheritance they have to pay taxes for? Or actually anything they own if it turns out the IRS can simply have it's own estimation of value and taxes based on that? If the IRS can just blurt out their own evaluation overriding any independent appraiser, even bump it up 300+% between draft and final evaluation, and tax you based on it then yes I do see quite a few people in this situation. I'll try to assume the best interpretation of what you wanted to say and guess that maybe you didn't think that if the IRS can do this for a $1bn inheritance (than can or cannot be sold) they can also do it for a $100 inheritance. It's the principle of them being allowed to make the authoritative appraisal (not their job) that's the issue here, not that they collect taxes (their job).

zaroth 7y ago

What makes you think they got to take the deduction?