Someone — and absolutely no one involved seems ready to say who — came up with an idea in 2012 for a patron to purchase 2,070 photos by the American portrait photographer Annie Leibovitz and then donate them to a museum in Canada. This was a colossal score for the Art Gallery of Nova Scotia in Halifax, which owned nothing by Ms. Leibovitz at the time. For Ms. Leibovitz, who had a financial crisis several years earlier, the transaction meant she earned several million dollars.This goes on at great length. By contrast, the commenters are brief and cutting:
And the donor, [Harley Mintz, the Deloitte Canada partner]... stood to qualify for a generous tax deduction and recognition as an arts patron. Four years later, though, a Canadian government panel that must sign off on the deduction is still balking at approving it, partly because the panel won’t accept a $20 million valuation for a collection that the donor purchased for just $4.75 million....
... Ms. Leibovitz has received only half of the promised $4.75 million. By contract, she does not receive the rest of the money unless the government panel signs off, according to Mr. Mintz.
1. "For the record, Ms. Liebovitz is generally considered a passable magazine photographer unworthy of museum collections. The MoMA, for example, has none of her photographs in its vast collection."
2. "Ah, the good old-fashioned donation evaluation for taxes. The wealthy have been doing this for a very long time. Museums are there for this very reason. To deposit overly valued art pieces in lieu of a tax deduction. Same goes for property, buildings and other funding to arts, medicine and pet projects. Art is tricky. How is it exactly evaluated? And by whom?"
3. "High-end highly-paid & highly dated celebrity photography seems an odd multimillion-dollar art investment for Nova Scotia even without that dodgy tax dodge."
4. "Herein lies the heart and soul of the art industry in our time."
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Local angle: In 1974 Skitch Henderson got into tax trouble for trying to deduct $350 grand for a music library he had donated to the University of Wisconsin music school. The IRS questioned the valuation, which was based on some forged documents, so Skitch had to go away for a few months at a minimum-security Federal pen.
I always confuse her with Fran Leibowitz.
Art Scam 101.
You could argue that Liebovitz’ actual profession is real-estate development rather than photography. From the Daily Mail: Annie Leibovitz FINALLY sells vast New York City home for $28.5 million after a year on the market – almost $5 million less than her original asking price “Ms Leibovitz, 63, created the 10,200 square-foot compound over a decade ago after purchasing the three buildings for $6.1million, and gut-renovating them.”
Next time we could look at conservation easements. More or less the same scam, different asset classes.
The only thing surprising about this scam is its brazenness. Deloitte FTW.
I confuse her with Fawn Liebowitz, the potter
Kiln explosion ruined many donatable artifacts,
Let's see: suppose A buys a piece of art for a few hundred dollars. Years later he sells it to B for many thousands, who a year later sells it back to A for roughly the same price he bought it for. A then donates it to a museum and deducts many thousands from his adjusted income. Would that be legal?
And what is a "permanent loan" of art to a museum? It is either an fee simple absolute gift or a loan for a term of years.
I am offering a tremendous deal for the savvy art buyer: a limited five-hundred edition run of my art piece "Two Hundred Dollars".
Each piece is a one-of-a-kind real U.S. hundred dollar bill, with unique serial number, and signed "I am Laslo" by me, the artist, Laslo.
The price for these unique pieces of art is two-hundred dollars each.
Each "Two Hundred Dollars" piece is a one-of-a kind statement on the abstraction of divining a price of artistic uniquity, and will surely only go up in value.
As stated, each piece is hand-signed by the artist Laslo, and when the five-hundred edition is sold out there will be no more, so act quickly.
Each piece is suitable for framing, or donating to the art museum of your choice.
I am Laslo.
And the best evidence of the fair market value of a gift is what a willing buyer paid; not someone else's opinion. If the expert opinion was right, then the photos should have sold for way more.
I drink your milkshake...
And donate it so I can take a tax deduction!
Ah, the good old-fashioned donation evaluation for taxes. The wealthy have been doing this for a very long time...
True dat, says the MST spouse. At least there's some kind of resale market for Annie Leibovitz. The fun really starts when we start placing values on one-offs and 'oddities', like model ships donated to the science museum.
Each "Two Hundred Dollars" piece is a one-of-a kind statement...
It's been done.
Her photographs are only interesting if you are familiar with the celebrities she depicts. Even then they are primarily jokey and sometimes clever, i.e. Whoopie Goldberg in a milk bath. In the future when most of her subjects will be unfamiliar, the images will be nothing special.
This is a form of tulipmania.
My daughter worked in an art gallery in LA where people would write $850,000 checks for "art" that I would not put in my bathroom.
I remember in the 70s when inflation really got going that people would buy all kinds of stuff as inflation hedges.
I remember when this old lady bought four Rolls Royces for $50,000 each and put them up on blocks.
She had the last laugh. I knew a guy who invested his pension plan in Bugattis. I don't think you can buy one for less than a million now.
Well, it was for a good cause - ripping off the Canadian government.
I don't usually agree with the NYT Commentariat but . . . yeah.
"Let's see: suppose A buys a piece of art for a few hundred dollars. Years later he sells it to B for many thousands, who a year later sells it back to A for roughly the same price he bought it for. A then donates it to a museum and deducts many thousands from his adjusted income. Would that be legal?"
It would be legal in the sense that the transactions would not break any laws. But as a tax matter, it is probably a sham transaction unless there was no prearrangement of the transactions. Even if it were not a sham, the tax graspers could take a look at the valuation. If it were fake values the deduction would be lost, and the parties to the transaction would likely be facing fraud charges.
Also A has a gain on the sale that is about equal to his fraudulent tax deduction. He might be worse off, taxed on the gain and denied the deduction.
Probably easier to get a dishonest appraisal and donate.
Or put a conservation easement on the painting.
During 2016 the Art Gallery of Nova Scotia in Halifax recorded 23 visitors. Two of them were thrilled with the photos.
Partner of mine invested in Ferraris. This was in the middle 80's. He bought five of them over a few years while the rest of us were buying real estate. He paid $350,000 for the last one, a car that had some famous racing history. We laughed. The real estate market crashed, we lost our ass and he sold four of his ferraris to a Japanese investor for $14,000,000. Lesson. Do what you love.
Leibovitz has a dismal reputation in the photo industry as a hack who abuses her assistants (upon whom she relies entirely or everything technical and aesthetic). She's also loathed by her neighbors or her real estate vandalism.
It's a tradition. The wealthy can't find conspicuous consumption as fun as Art by new artists. They get to decorate their homes and some day sell at appreciated prices...they are sold believing that is a sure thing.
But 20 years later they need to. Move and there is no market. To unload the statues, figures, paintings requires a municipality that wants art in new buildings, campuses, or storage. Then add a appraiser that marks it up times 10 and the IRS accepts the Donation Reciept as a deduction saving 33 % of the inflated Appraisal.
This is standard Art World rules.
The reason this collection is worth $20 million is because it assembles so many works in one place. You can't just look at the value of each print in isolation, you have to consider what they are worth as a unified group. Oh, never mind.
I knew an artist who claimed he had deducted an Egyptian mummy.
Art is a taxing proposition.
The $20 mil valuation is just an opening gambit. The purchaser can claim that he bought art at a "distressed" price (which is true), find an art appraiser who, like Eric above, can claim that the sum is worth more than the parts, & probably settle with the Canadian government for a $10 mil deduction. I bet he said $20 mil just to see what he could get away with.
I doubt the Canadians will go for the obviously sketchy valuation. Why would they? Too much of a hassle to read the article if it isn't clear in the details but if this were with the IRS more likely the valuation would the amount the artist got for it. Which so far is half of the $4.7mm. Bit bold to pay the artist $2.3mm in cash with a promise to pay another $2.3mm ( if the deal went through) and then claim $20mm in charitable deductions. I doubt Revenue Canada tax specialists are that easily fooled.
Leibovitz is very good at what she does but what she does isn't all that.
I asked a young friend who was an aspiring photographer who her favorite photographer was. When she said Annie Leibovitz, I told her to aim higher.
I have a small collection of 911-related stuff that includes the Vanity Fair issue featuring Leibovitz's fold-out cover photo of Bush, Cheney, Rumsfeld, Powell and Rice (remember how media called them the most experienced foreign affairs/national security team ever--it was a meme for a while). It's a very interesting photograph.
I can remember studying the above-referenced photo and thinking that these were probably the five most powerful, consequential people on the planet at that moment and here one was a woman and two were black. Funny how that never seems to matter in the least if the women and minorities aren't also liberal.
"And the best evidence of the fair market value of a gift is what a willing buyer paid; not someone else's opinion. If the expert opinion was right, then the photos should have sold for way more."
Wouldn't that be nice.
Try getting the government to value your house - for tax purposes - at what someone would pay for it after a housing crash.
Doesn't this demonstrate the lunacy of tax laws? And shouldn't the government abide by the laws they have put in place, whether the like a specific instance of application of that law or not?
Bill and Hillary deducted the value of their used underwear when it was donated to charity. Now there's collectors item.
Hey! How do I get in on this action. I've got LOTS of photos!
Anybody with assistants and some basic equipment can make superb portraits. Assistants only make the job easier. The pregnant Demi Moore photo is basic photography; nothing special about it all except Demi Moore.
If there is a recent sale, that should set the value for tax purposes. No 'if's 'and's or 'but's. There can be something to talk about if an item hasn't been sold for many years, and is unique such that there are no good comparables.
Period.
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