James Freeman on thu 26 jul 12
There has been a lot of discussion of late as to the value of certain
college majors. Is the value of the degree based on the future expected
cashflow to be derived from it, or on some nebulous and ill-defined
"higher" factors? Likewise, we have discussed in the past the value of
Art. Is the value based on the work as a material object, or on some
similar "higher" factors?
A fascinating case is about to work its way through the courts. A wealthy
collector has bequeathed to her heirs, among other things, a
painting/sculpture/whatever by Robert Rauschenberg entitled "Canyon". The
piece consists of a splooshy "abstract" painting with a taxidermied (is
that a word?) bald eagle glued to it. The IRS, of course, wants a cut of
the loot. They valued the painting/bird at $65 million, and want $29
million in inheritance taxes. The problem, however, is that it is illegal
in this country to sell anything containing any part of a bald eagle, even
so much as a feather. Rauschenberg skirted the law by claiming that he
purchased the stuffed eagle used, and that it predates the law. The now
deceased owner had kept the painting/bird in what was essentially a state
of legal limbo; not really legal, but no one bothered her about it either.
Since the painting/bird cannot be sold legally to anyone, at any price,
Christie's auction house provided the heirs with a written valuation of
zero, valueless. The IRS thinks that the painting/bird has an intrinsic
value (based on what the Rauschenberg stuffed sheep in the inner tube is
"worth") of $65 million, even though it has a market value of zero. An
interesting conundrum, almost worthy of Solomon.
If we were talking about a more mundane object, say a collector automobile,
there would be little argument that the car is worth precisely the highest
bid at auction, regardless of what the seller may believe to the contrary.
You can argue all day long about what it "should" be worth, but the
judgment of the market is final. Likewise a share of stock, which is worth
precisely whatever the current bid price is on the stock exchange,
regardless of what an analyst believes it should be worth. So why should a
painting, or any art object, be any different?
Here is a link to the full article:
http://www.foxnews.com/us/2012/07/24/irs-art-collection-heirs-hope-to-settl=
e-bizarre-tax-dispute-over-canyon-collage/
Well, back to the studio. My work is taking a strange turn. I think I
need a critique!
All the best.
...James
James Freeman
"Talk sense to a fool, and he calls you foolish."
-Euripides
http://www.jamesfreemanstudio.com
http://www.flickr.com/photos/jamesfreemanstudio/
http://www.jamesfreemanstudio.com/resources
| |
|
