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I ask because I think the price is only as high if the item in question is still cultural relevant. Les Poseuses Ensemble by Georges Seurat was sold for $149m.

by onion2k 11mo ago

I ask because I think the price is only as high if the item in question is still cultural relevant. Les Poseuses Ensemble by Georges Seurat was sold for $149m. Very few people have heard of it, care about it, or even like it considering it's pointillism which no one buys modern versions of. The world of art and collectables is entirely rich people speculating that the price (not value) will go up in the future.

saretup 11mo ago
Don’t forget the tax savings.
- stavros 11mo ago
  What tax savings? How does that work?
  - saretup 11mo ago
    Different tax loopholes depending on region etc, but basically like this: I’m a billionaire earning $100M this year. I owe $40M as taxes for that. (Too much!) I find a dumb banana painting by a starving artist. I buy it from him for $1000. I wait 6 months. I go to a museum to get it appraised by “professionals”. I pay the professional appraiser’s wife $50K as a gift. The appraiser says the painting is now worth $30M! Wow that’s awesome, I have such a keen eye for art. You know what, I’m gonna donate this painting to a museum instead because I’m such a patron of art and culture. Oh, look at that, I get a tax rebate for the value of my donated painting ($30M) Now I only have to pay $40M - $30M = $10M in taxes on my $100M income. There’s more nuance to it in practice, but that’s the gist of it. ----- Edit: For some reason I can't reply to the comments below so I'm gonna do it here. > That wouldn't explain the price here, since in your scam the whole idea is to buy cheap and donate dear. not buy for 139M Now we're getting in the details but it's very suspicious for an appraiser to appraise a work of art from an unknown artist at millions. But it's not that suspicious if they take Van Gogh's Starry Night which was previously appraised at $500M to now be valued at $1B. this way the deca-billionaire still gets to save his taxes while appraiser avoids suspicion. > As far as I know, that's not how taxes work. You can't get a rebate for the amount of taxes you would have paid, you can get a deduction for the amount of money you made. There are a lot of loopholes in the complicated tax system for the ultra-wealthy, not for us. This video (still a simple explanation in an animated way) covers a few more of them: https://www.youtube.com/watch?v=dHy07B-UHkE https://www.youtube.com/watch?v=dHy07B-UHkE
    - stavros 11mo ago
      As far as I know, that's not how taxes work. You can't get a rebate for the amount of taxes you would have paid, you can get a deduction for the amount of money you made. So: You made $100M owe $40M in taxes. Your painting is worth $30M! You have such a keen eye for art. Now you made $130M and owe $50M in taxes. You donate the painting, you're back at having made $100M and owing $40M. Otherwise we'd all choose not to pay tax and donate our tax money to charitable institutions instead.
      - renewiltord 11mo ago
        I’m pretty sure he’s right in how taxes work. There’s no moment where the value of the painting is realized but you are allowed to deduct the FMV if you make enough and if the donation goes to the charity’s exempt use (which it will if it’s a museum or whatever). So if you buy painting for a dollar and wait a year then next year you make $3m and the painting is now worth $1m then if you donate it, your AGI is reduced to $3m-min($1m, 30% of income) = $3m-$900k. You don’t count the appreciation of the painting as income. You don’t even count it as LTCG if you don’t sell it. I think it also applies to stock option awards. When the startup I was at was acquired some people were talking about it.
        __s 11mo ago
        There was a subtle mistake: the 30M would be deducted from taxable income (in Canada I was only able to deduct from capital gains)
    - namdnay 11mo ago
      That wouldn't explain the price here, since in your scam the whole idea is to buy cheap and donate dear. not buy for 139M
    - bazoom42 11mo ago
      Your scheme involves getting a fake appraisal for a value higher than the market price. But this does not explain high prices at an auction.
- stonecharioteer 11mo ago
  Dunno why I can't reply to your other comment explaining what you mean but hot damn. False evaluation of a cheap painting to save on taxes? That's mental.
larusso 11mo ago
Ah damn. I forgot to add in the whole world of art collection which of course this item belongs in as well. Still baffles me how we humans can put such high prices on some items
- wahnfrieden 11mo ago
  It’s mostly money laundering and loan collateral
  - JKCalhoun 11mo ago
    I thought it was bragging rights for the terminally insecure billionaire class.
    - wahnfrieden 11mo ago
      They get stored in warehouses. No one sees most of this art
      - JKCalhoun 11mo ago
        I assumed they were stored in yachts or "chateaus" in Jackson Hole, Wyoming.
squigz 11mo ago
Surely some of it is also the simple fact of... these people are very rich and want some art they enjoy. The same way a regular person might buy an autographed photo of a celebrity they like or something like that.

by onion2k 11mo ago

saretup 11mo ago

Don’t forget the tax savings.

stavros 11mo ago
What tax savings? How does that work?
- saretup 11mo ago
  Different tax loopholes depending on region etc, but basically like this: I’m a billionaire earning $100M this year. I owe $40M as taxes for that. (Too much!) I find a dumb banana painting by a starving artist. I buy it from him for $1000. I wait 6 months. I go to a museum to get it appraised by “professionals”. I pay the professional appraiser’s wife $50K as a gift. The appraiser says the painting is now worth $30M! Wow that’s awesome, I have such a keen eye for art. You know what, I’m gonna donate this painting to a museum instead because I’m such a patron of art and culture. Oh, look at that, I get a tax rebate for the value of my donated painting ($30M) Now I only have to pay $40M - $30M = $10M in taxes on my $100M income. There’s more nuance to it in practice, but that’s the gist of it. ----- Edit: For some reason I can't reply to the comments below so I'm gonna do it here. > That wouldn't explain the price here, since in your scam the whole idea is to buy cheap and donate dear. not buy for 139M Now we're getting in the details but it's very suspicious for an appraiser to appraise a work of art from an unknown artist at millions. But it's not that suspicious if they take Van Gogh's Starry Night which was previously appraised at $500M to now be valued at $1B. this way the deca-billionaire still gets to save his taxes while appraiser avoids suspicion. > As far as I know, that's not how taxes work. You can't get a rebate for the amount of taxes you would have paid, you can get a deduction for the amount of money you made. There are a lot of loopholes in the complicated tax system for the ultra-wealthy, not for us. This video (still a simple explanation in an animated way) covers a few more of them: https://www.youtube.com/watch?v=dHy07B-UHkE https://www.youtube.com/watch?v=dHy07B-UHkE
  - stavros 11mo ago
    As far as I know, that's not how taxes work. You can't get a rebate for the amount of taxes you would have paid, you can get a deduction for the amount of money you made. So: You made $100M owe $40M in taxes. Your painting is worth $30M! You have such a keen eye for art. Now you made $130M and owe $50M in taxes. You donate the painting, you're back at having made $100M and owing $40M. Otherwise we'd all choose not to pay tax and donate our tax money to charitable institutions instead.
    - renewiltord 11mo ago
      I’m pretty sure he’s right in how taxes work. There’s no moment where the value of the painting is realized but you are allowed to deduct the FMV if you make enough and if the donation goes to the charity’s exempt use (which it will if it’s a museum or whatever). So if you buy painting for a dollar and wait a year then next year you make $3m and the painting is now worth $1m then if you donate it, your AGI is reduced to $3m-min($1m, 30% of income) = $3m-$900k. You don’t count the appreciation of the painting as income. You don’t even count it as LTCG if you don’t sell it. I think it also applies to stock option awards. When the startup I was at was acquired some people were talking about it.
      - __s 11mo ago
        There was a subtle mistake: the 30M would be deducted from taxable income (in Canada I was only able to deduct from capital gains)
  - namdnay 11mo ago
    That wouldn't explain the price here, since in your scam the whole idea is to buy cheap and donate dear. not buy for 139M
  - bazoom42 11mo ago
    Your scheme involves getting a fake appraisal for a value higher than the market price. But this does not explain high prices at an auction.
stonecharioteer 11mo ago
Dunno why I can't reply to your other comment explaining what you mean but hot damn. False evaluation of a cheap painting to save on taxes? That's mental.

larusso 11mo ago

Ah damn. I forgot to add in the whole world of art collection which of course this item belongs in as well. Still baffles me how we humans can put such high prices on some items

wahnfrieden 11mo ago
It’s mostly money laundering and loan collateral
- JKCalhoun 11mo ago
  I thought it was bragging rights for the terminally insecure billionaire class.
  - wahnfrieden 11mo ago
    They get stored in warehouses. No one sees most of this art
    - JKCalhoun 11mo ago
      I assumed they were stored in yachts or "chateaus" in Jackson Hole, Wyoming.

squigz 11mo ago

Surely some of it is also the simple fact of... these people are very rich and want some art they enjoy. The same way a regular person might buy an autographed photo of a celebrity they like or something like that.