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Valuation – More Art than Science

Volume 4 No 4    /    Read Article

By Nina Krauthamer and Kenneth Lobo

In a recent case, the Tax Court was asked to evaluate two Old Masters paintings from the 17th century. Sotheby’s provided the valuation for estate tax purposes on a gratuitous basis. The appraised value totaled $600,000 for the two works. The estate retained the same auction house to sell one of the paintings. The sale price at auction was $2.1 million before buyer’s premium, and the auction took place within 34 months of the issuance of the appraisal report. Kenneth Lobo and Nina Krauthamer explain why the court had no difficulty finding that the estate’s expert was not independent and that the subsequent sale was relevant.    See more →