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> For that matter, they could also buy a piece of art for a million dollars, a year later get it appraised as worth $40 million, donate it, and then write off $
by blackhawkC17 2y ago
> For that matter, they could also buy a piece of art for a million dollars, a year later get it appraised as worth $40 million, donate it, and then write off $39 million. Again, as far as I know this isn't strictly illegal, but it can be used to evade taxes.
This is so wrong it hurts my brain. The IRS requires using a qualified appraiser, and none of them will suddenly appraise an artwork for 40x its last sold value. The IRS aren't fools-- they'll quickly clamp down on such an anomaly.
Even if this amateur scheme were true, the individual wouldn't write off $39 million. They'll deduct the tax rate (%) of $39 million.
- tombert 2y agoI doubt every "qualified appraiser" is above being bribed. I thought it was implied that writing off $39 million didn't mean a $39 million dollar reduction in taxes.
- fooker 2y agoMerely a ~20 million reduction, nothing to sneeze at.
- quartesixte 2y agoIsn't this one of the reasons why most very expensive art pieces are sold in auctions? The auction acts as a qualified appraiser because of price discovery via competition makes the price very real (after all, what is price but supply and demand?) Although I guess there is nothing stopping Soteby's from setting the base price absurdly high to begin with . . .