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Ralph E Lerner: Nazis, Fakes, Taxes II.ppt

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Ralph E Lerner: Nazis, Fakes, Taxes II.ppt

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http://www.ralphelerner.com

Ralph E. Lerner is an Art law and individual tax and estate planning specialist at national general practice law firm. Ralph Lerner's experience consists of advising on a great variety of tax matters including all aspects of estate planning and will drafting, estate and gift tax problems, charitable contributions, trust accounting, individual income tax planning, private foundations, and Tax Court proceedings. Ralph Lerner's experience includes extensive dealings with the Internal Revenue Service at all levels. Ralph E. Lerner has specialized knowledge in all aspects of art law including dealing with auction houses, consignment agreements, artist commission agreements, and tax planning for items of tangible personal property.

http://youtu.be/aqDUKnRM8PY

http://www.ralphelerner.com

Ralph E. Lerner is an Art law and individual tax and estate planning specialist at national general practice law firm. Ralph Lerner's experience consists of advising on a great variety of tax matters including all aspects of estate planning and will drafting, estate and gift tax problems, charitable contributions, trust accounting, individual income tax planning, private foundations, and Tax Court proceedings. Ralph Lerner's experience includes extensive dealings with the Internal Revenue Service at all levels. Ralph E. Lerner has specialized knowledge in all aspects of art law including dealing with auction houses, consignment agreements, artist commission agreements, and tax planning for items of tangible personal property.

http://youtu.be/aqDUKnRM8PY

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Ralph E Lerner: Nazis, Fakes, Taxes II.ppt

  1. 1. Nazis, Fakes, Taxes II by Ralph E. Lerner RalphELerner.com ralph@artworldadvisors.com 590 Madison Ave, New York, NY, 10022 (212) 521-4437 http://www.RalphELerner.com/
  2. 2. Pablo Picasso – Femme aux bras crois s http://www.RalphELerner.com /
  3. 3. Max Beckmann – Self-Portrait with Horn http://www.RalphELerner.com/
  4. 4. Casualty Loss – §165(h) The lower of the fair market value or the cost per item lost less $100 per casualty. http://www.RalphELerner.com/
  5. 5. Casualty Loss – §165(h) The lower of the fair market value or the cost per item lost less $100 per casualty. Now But only to the extent such amount is greater than 10% of adjusted gross income. http://www.RalphELerner.com/
  6. 6. Edgar Degas, LANDSCAPE WITH SMOKE STACKS Pastel over monotype, ca. 1890-93 http://www.RalphELerner.com/
  7. 7. STATUTE OF LIMITATIONS - TITLE § 2-275 1 - prompt filing of suits 2 - protection for a defendant after period of repose - evidence can be lost or destroyed with passage of time 3 - promotion of free trade An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. http://www.RalphELerner.com/
  8. 8. DISCOVERY RULE Gregory Erisoty v. Jacqueline Rizik An owner’s cause of action does not accrue until he discovers or by exercise of reasonable diligence and intelligence should have discovered, facts which form the basis of a cause of action Corrado Giaquinto Winter http://www.RalphELerner.com/
  9. 9. DEMAND REFUSAL RULE DeWeerth v. Baldinger An owner’s obligation to make a demand without unreasonable delay includes an obligation to use due diligence to locate the stolen property Claude Monet Champs de Ble a Vetheuil 1879 http://www.RalphELerner.com/
  10. 10. Guggenheim v. Lubell An owner has no obligation to use due diligence to locate his stolen property - whether it was unreasonable not to do more is an issue of fact relevant to the defense of laches The Cattle Dealer (Le Marchand de Bestiaux) Marc Chagall 1912 http://www.RalphELerner.com/
  11. 11. Patriarchate of Jerusalem v. Christie’s An owner’s reasonable diligence in locating his lost property is highly relevant to a laches defense Doing nothing for 70 years is not reasonable Archimedes Palimpsest 10th century manuscript contains writing of Archimedes http://www.RalphELerner.com/
  12. 12. Edgar Degas, LANDSCAPE WITH SMOKE STACKS Pastel over monotype, ca. 1890-93 http://www.RalphELerner.com/
  13. 13. STATUTE OF LIMITATIONS - AUTHENTICITY Rosen v. Spanierman Four year statute of limitations applies. A warranty of authenticity does not extend to future performance of the goods. Lack of knowledge of the breach is not a defense. The Misses Wertheimer John Singer Sargeant http://www.RalphELerner.com /
  14. 14. BALOG v. CENTER ART GALLERY Hawaii In the case of artwork which is certified authentic by an expert in the field or a merchant dealing in goods of that type, such a certification of authenticity constitutes an explicit Warranty of future performance sufficient to toll the U.C.C.’s statute of limitations - but only in Hawaii http://www.RalphELerner.com/
  15. 15. DAMAGES - BREACH WARRANTY TITLE Menzel v. List 1932 - Menzel Purchases for $150 1941 - Painting taken by Nazis 1941-1955 - Location not known 1955 - Perls purchases from dealer in Paris for $2,800 1955 - Perls sells to List for $4,000 1962 - Menzel say “Give it back” 1966 - Jury for Menzel - value now $22,500 Jacob’s Ladder Marc ChagallMeasure of damages $22,500 http://www.RalphELerner.com/
  16. 16. DAMAGES - FRAUD Nacht v. Sotheby’s 1981 - Nacht purchases for $23,815 1996 - Nacht discovers it is not authentic - if it was authentic value $225,000 Measure of damages $23,815 Francis Picabia Josias 1930 http://www.RalphELerner.com/
  17. 17. TAXATION http://www.RalphELerner.com/
  18. 18. Where is the Painting? http://www.RalphELerner.com/
  19. 19. Cost FMV Deduction (within 30% limit) Tax Saved (Fed. 35.0 rate) Cost UNTAXED PROFIT $ 1,000 $ 10,000 $ 10,000 $ 3,500 $ 1,000 $ 2,500 and you enjoyed the use of the donated item for the period of ownership The Art Tax Shelter http://www.RalphELerner.com/
  20. 20. The Four Questions 1. What type of donee organization - public charity or private foundation? http://www.RalphELerner.com/
  21. 21. 1. What type of donee organization - public charity or private foundation? 2. What type of property - ordinary income type property or long-term capital gain type property? The Four Questions http://www.RalphELerner.com/
  22. 22. 1. What type of donee organization - public charity or private foundation? 2. What type of property - ordinary income type property or long-term capital gain type property? 3. Have you satisfied the related-use rule? The Four Questions http://www.RalphELerner.com/
  23. 23. 1. What type of donee organization - public charity or private foundation? 2. What type of property - ordinary income type property or long-term capital gain type property? 3. Have you satisfied the related-use rule? 4. Have you obtained a qualified appraisal by a qualified appraiser? The Four Questions http://www.RalphELerner.com/
  24. 24. FUTURE INTEREST RULE Section 170(a)(3) - There is no charitable deduction for a gift of a future interest in tangible personal property until there is no intervening interest in, right of possession of, or enjoyment of the property held by the donor, spouse or certain related individuals. http://www.RalphELerner.com /
  25. 25. FRACTIONAL INTEREST Winokur v. Commissioner Women of Warhol Marilyn, Liz & Jackie http://www.RalphELerner.com/
  26. 26. FAIR MARKET VALUE Hypothetical Willing Buyer/ Hypothetical Willing Seller http://www.RalphELerner.com/
  27. 27. Quedlinburg Treasures Fair Market Value is determined in the retail market in which the item is most commonly sold to the public. http://www.RalphELerner.com/
  28. 28. Rev. Proc. 96-15 Advance Valuation Ruling Request 1. Applies to items $50,000 and above 2. User fee of $2,500 for first three items, $250 for each additional item 3. Requires a qualified appraisal by a qualified appraiser 4. Can be used for income tax or estate tax purposes 5. The ruling, once issued, is binding on the IRS http://www.RalphELerner.com/
  29. 29. ROTHKO Avoid Conflicts of Interest Duty of Loyalty An executor must care and manage the assets and affairs of the estate as would prudent persons of discretion and intelligence accented by “not honesty alone” but by the punctilio of an honor the most sensitive. http://www.RalphELerner.com/

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