Sometimes you hear about an estate planning case that seems a bit bizarre, and this is certainly true when it comes to the case of the Robert Rauschenberg sculptural combine “Canyon.”
“Canyon” would be a very valuable work of art except for one thing: It can never be sold.
The sculptural combine features a stuffed bald eagle. Due to federal regulations you cannot buy or sell a member of the species.
This combine was the property of noted art dealer Ileana Sonnabend at the time of her death. She left it to her children along with an extraordinary cache of other artwork.
When everything was tallied up, the heirs to the estate owed $471 million in federal and state estate taxes, and they paid this sum.
In spite of this, the IRS felt shortchanged because the value of “Canyon” was not taken into consideration when the estate tax responsibility was being calculated by the family of the deceased art dealer.
The IRS said that the value of the combine was $65 million. As a result they were looking for an additional $29.2 million in taxes along with some $11.7 million in penalties.
Does a work of art that cannot be sold have taxable value? In essence the value of anything is calculated by what someone would pay for it, so many would say no.
Ultimately a settlement was reached. The heirs to the estate did not pay any further estate taxes, but they had to surrender ownership of the sculptural combine. It has been donated to the Museum of Modern Art in New York.
- Is a Person Who is Not a US Citizen Subject to the Federal Estate Tax? (VIDEO) - December 9, 2022
- Common Mistakes in Estate Planning – Part IV - December 8, 2022
- 2023 Estate Tax Exemption and Gift Tax Exclusion Update (Video) - December 7, 2022