Judge Does Not Believe Appraisal Excuse, Elder Law Attorney, Woodstock, GA

A common point of contention between wealthy estates and the IRS is the value of artwork at the time the deceased passes away. The estate wants lower valuations for estate tax purposes, but the IRS does not always accept them.

The value of artwork in an estate is difficult to determine. A true value cannot be given, until a piece is sold. However, for many reasons, the estate might not wish to sell the art right away to determine the value.

The value has to be determined for wealthy estates, however, for estate tax purposes.

To do this, estates employ expert appraisers who give their estimates for what the art would likely fetch at auction. This can create problems, if the art later sells for much more than the appraised value.

This was the case in a recent tax court matter discussed by The New York Times in "Don't Blame the Russians, Tax Judge Tells Sotheby's Expert."

It seems a painting was valued by Sotheby's at $500,000 and that was the value given to the IRS. However, four years later, the same painting sold at auction by Sotheby’s for $2.1 million.

The appraiser explained that the primary reason for the discrepancy was that Russian collectors bid the piece up, as they are attempting to get their hands on artwork.

The judge did not believe that and instead determined that Sotheby's had intentionally low-balled the appraisal value to curry favor with the estate, so the auction house would be used when the painting was later sold.

Needless to say, it would have been better for the estate in the long run to have just been given the correct appraisal value from the beginning.

Reference: New York Times (April 23, 2017) "Don't Blame the Russians, Tax Judge Tells Sotheby's Expert."


Hear From Our Clients

I heard Cindy’s presentation at a Senior Luncheon at my church, and was very impressed. She helped my daughter and me understand many aspects of elder law. Josh has also been very helpful in my planning to enter an independent living situation . I have told many friends about them.

- Charlotte

The very best elder law attorney and staff anyone could ever ask for! I have referred a number of clients to Cindy and she never disappoints. She is kind, caring, and extremely thorough in making sure everything is completed as it should be. I highly recommend Cindy for anyone needing lawyer services; she truly goes above and beyond for every client she helps and has had a huge impact in so many peoples’ lives. Thank you, Cindy and staff, for everything that you do- I’m so glad to know you!

- Kerri

Cindy and the Nelson Elder Care Law team are trustworthy and helpful. They are the experts in elder care law. At Leaf Cremation, we entrust our families to the care of the Nelson team when their services are needed.

- Pierce

Josh Nelson, and his staff, have been amazingly helpful to our family. The ins and outs of nursing homes, the rules and regulations that govern Medicare and Medicaid are daunting and the folks at Nelson Elder Care Law have been informative, responsive, and above all, empathetic. I cannot emphasize enough how their service has taken a weight off of our shoulders especially during a world pandemic that has targeted nursing homes across our country. I highly recommend retaining Josh and his firm!

- Marcia

I had a simple legal question to them that I needed answered and they very helpful in giving me the information I needed. I highly recommend them and will reach out to them if I need more advice or assistance. Thank you for taking your time to just answer a couple of questions I had!

- Ben