The esteemed art dealer Ileana Sonnabend passed away in 2007. At that time she was in possession of an art collection valued at around $1 billion.
When you consult with a local Long Island estate planning attorney he or she will emphasize the impact that the estate tax can have on your legacy. This case gives you an idea about just how severe it can be. The children of Ileana Sonnabend had to pay out $471 million to cover estate taxes on both the federal and the state level.
It would be logical to assume that they felt as though they had paid their fair share at that point. However, the Internal Revenue Service had other ideas. They were presented with an additional bill of over $29 million with penalties tacked on bringing the figure up to some $40 million.
What was this added levy all about? It involved the Robert Rauschenberg sculptural combine “Canyon.”
There is a real stuffed bald eagle included in the artistic combine. This is a protected species, and you cannot sell a stuffed bald eagle even if it is contained within a respected work of art such as this one.
The heirs to the estate could never sell the piece so they were of the mind that it had no taxable value since it has no value on the fair market.
While this argument certainly makes sense the Internal Revenue Service still demanded payment, estimating the value of the work at $65 million.
Fortunately for the heirs they were able to reach an agreement with the IRS that spared them this $40 million expense. The IRS offered to desist in return for the family divesting itself of ownership of the painting by donating it to a museum. They agreed, and “Canyon” is now part of the collection of the New York Museum of Modern Art in midtown Manhattan.
- What You Need to Know about the New York Medicaid Estate Recovery Program - June 15, 2022
- How to Decide Which Kind of Last Will and Testament Is Right for You - June 1, 2022
- How to Be a Caregiver from a Distance - May 25, 2022