6 ms·

> 471 million in estate taxes on a $1 billion collection? That's depressing. Why?

by rat87 14y ago

kevingadd 14y ago
Even assuming they can find buyers for enough of the collection to pay the taxes, that's an enormous, instantaneous pile of stress on the children of a parent who just died and is probably missed tremendously. Hey kids, I hear your parent died? Great! You owe us 500 million dollars, get to work. I think estate taxes are defensible, but the way this particular estate was handled doesn't seem defensible. Out of all the things someone could do with their vast fortunes, buying art and then loaning it out to museums and collections doesn't seem like the worst thing in the world. In particular, the article points out that black market valuations may have even been considered when valuing the art in the estate: That means the government is basically encouraging these works of art to be sold on the black market (likely to private collectors who will keep them in private), where if they were at least sold on the open market - or in this case, held by the original owners - they would be more likely to be put on loan to museums so the public could benefit from them. Alternately, in a case like this where it's illegal to sell the item being taxed, the government should offer the option of simply handing it over to them in order to erase the tax liability, or giving it to a charity, in order to conclusively demonstrate that no profit is being made from the work of art (black market or otherwise).
- megablast 14y ago
  Yes, because it is instantaneous, and not months down the line.
  - jhaglund 14y ago
    Also, with this much money involved, I'd pay someone to handle it for me.
- deleted 14y ago
  [deleted]
- rat87 14y ago
  Yes arguably the valuations are a bit screwy. > Hey kids, I hear your parent died? Great! You owe us 500 million dollars, get to work. Clearing up a dead parents estate an be psychologically challenging. Luckily most people paying the estate tax can afford lawyers to help them muddle through. If you have a well adjusted family and the person doesn't die suddenly you could even plan a lot of this ahead of time.
- astrodust 14y ago
  If you're paying $500M in taxes, you just inherited so much money you'd need several trucks to take it to the bank. So you're supposed to feel sorry for people in that position? That they have to pay so much tax they might have only a few hundred million left to pad out their mattress? Most people are ground down to nearly nothing by taxes and cripplingly high insurance premiums. They should be so lucky to have this much left over after taxes. You know what most kids inherit when their parents die? A giant tab for the funeral.
  - swombat 14y ago
    No one has $500m of cash lying around in a liquid form. Generating that kind of cash, even for the very rich, usually involves selling lots of assets at rock bottom price. Moreover, when the cash is tied up in an art collection, the valuation is really tricky. Art that earns a $500m tax bill could easily be worth less than that if sold immediately - as is, in fact, the case with the piece under consideration. As for the fact that most people inherit debts from their parents, I don't see how that's material to the discussion at hand.
    - antidaily 14y ago
      The article says they sold $600m of the collection. Which means even with the huge tax bill, they have over $100m plus whatever art they havent sold left.
      - astrodust 14y ago
        To be fair, if you piloted your $100M yacht into Monaco harbor you'd have to anchor your sad little boat way in the back. Think of the shame this brings!
  - delinka 14y ago
    "So you're supposed to feel sorry for people in that position?" Because, God forbid, we treat other humans as humans. They've got some form of pretend wealth so screw them. Right?
- Retric 14y ago
  If you quickly sell the art at auction and it sells for X. Then you owe taxes on X and not whatever the IRS appraised it at.
- mistercow 14y ago
  >Even assuming they can find buyers for enough of the collection to pay the taxes, that's an enormous, instantaneous pile of stress on the children of a parent who just died and is probably missed tremendously. Yeah, it sucks, and it's not ideal, but out of all the places the government can extract money to benefit society, it's one of the most effective and least painful in the big picture.
- cbs 14y ago
  Hey kids, I hear your parent died? Great! You owe us 500 million dollars, get to work. Hey kids, I hear your parent died? Great! You get to keep half their of their shit that you did absolutely nothing to earn for yourself.

> 471 million in estate taxes on a $1 billion collection? That's depressing. Why?

by rat87 14y ago

> 471 million in estate taxes on a $1 billion collection? That's depressing. Why?

Even assuming they can find buyers for enough of the collection to pay the taxes, that's an enormous, instantaneous pile of stress on the children of a parent who just died and is probably missed tremendously. Hey kids, I hear your parent died? Great! You owe us 500 million dollars, get to work. I think estate taxes are defensible, but the way this particular estate was handled doesn't seem defensible. Out of all the things someone could do with their vast fortunes, buying art and then loaning it out to museums and collections doesn't seem like the worst thing in the world. In particular, the article points out that black market valuations may have even been considered when valuing the art in the estate: That means the government is basically encouraging these works of art to be sold on the black market (likely to private collectors who will keep them in private), where if they were at least sold on the open market - or in this case, held by the original owners - they would be more likely to be put on loan to museums so the public could benefit from them. Alternately, in a case like this where it's illegal to sell the item being taxed, the government should offer the option of simply handing it over to them in order to erase the tax liability, or giving it to a charity, in order to conclusively demonstrate that no profit is being made from the work of art (black market or otherwise).

megablast 14y ago
Yes, because it is instantaneous, and not months down the line.
- jhaglund 14y ago
  Also, with this much money involved, I'd pay someone to handle it for me.
deleted 14y ago
[deleted]
rat87 14y ago
Yes arguably the valuations are a bit screwy. > Hey kids, I hear your parent died? Great! You owe us 500 million dollars, get to work. Clearing up a dead parents estate an be psychologically challenging. Luckily most people paying the estate tax can afford lawyers to help them muddle through. If you have a well adjusted family and the person doesn't die suddenly you could even plan a lot of this ahead of time.
astrodust 14y ago
If you're paying $500M in taxes, you just inherited so much money you'd need several trucks to take it to the bank. So you're supposed to feel sorry for people in that position? That they have to pay so much tax they might have only a few hundred million left to pad out their mattress? Most people are ground down to nearly nothing by taxes and cripplingly high insurance premiums. They should be so lucky to have this much left over after taxes. You know what most kids inherit when their parents die? A giant tab for the funeral.
- swombat 14y ago
  No one has $500m of cash lying around in a liquid form. Generating that kind of cash, even for the very rich, usually involves selling lots of assets at rock bottom price. Moreover, when the cash is tied up in an art collection, the valuation is really tricky. Art that earns a $500m tax bill could easily be worth less than that if sold immediately - as is, in fact, the case with the piece under consideration. As for the fact that most people inherit debts from their parents, I don't see how that's material to the discussion at hand.
  - antidaily 14y ago
    The article says they sold $600m of the collection. Which means even with the huge tax bill, they have over $100m plus whatever art they havent sold left.
    - astrodust 14y ago
      To be fair, if you piloted your $100M yacht into Monaco harbor you'd have to anchor your sad little boat way in the back. Think of the shame this brings!
- delinka 14y ago
  "So you're supposed to feel sorry for people in that position?" Because, God forbid, we treat other humans as humans. They've got some form of pretend wealth so screw them. Right?
Retric 14y ago
If you quickly sell the art at auction and it sells for X. Then you owe taxes on X and not whatever the IRS appraised it at.
mistercow 14y ago
>Even assuming they can find buyers for enough of the collection to pay the taxes, that's an enormous, instantaneous pile of stress on the children of a parent who just died and is probably missed tremendously. Yeah, it sucks, and it's not ideal, but out of all the places the government can extract money to benefit society, it's one of the most effective and least painful in the big picture.
cbs 14y ago
Hey kids, I hear your parent died? Great! You owe us 500 million dollars, get to work. Hey kids, I hear your parent died? Great! You get to keep half their of their shit that you did absolutely nothing to earn for yourself.