Cheaper By The Dozen?: Blockage Discounts in Art Valuation
By J. Lee Drexler and James R. Cohen
David Smith, the now famous American sculptor, died in 1965 owning 425 pieces of his own creation. In the audit of the estate tax return, the IRS valued each piece as if it had been sold separately. The estate argued for a “blockage discount,” a valuation based on what could be obtained if all 425 sculptures were offered for sale at the same moment. The 1972 Tax Court opinion on the issue (57 T.C. 650), written by Judge Tannenwald, is the well-spring from which all art blockage discounts flow, and well worth reading for blockage and several other valuation issues. This article summarizes the key issues and offers valuable information for collectors focusing on single artists.
Avoiding
Fakes and Forgeries When Buying Paintings
Lee Drexler
May 5, 2003
Every year, thousands of people buy paintings they thought were by particular artists and later learned, to their dismay, that they are forgeries. There are ways to protect yourself if you are willing to take the time and effort to do so.
Appraising Personal Property in Divorce
BY J. LEE DREXLER
When an appraiser is retained to appraise tangible personal property (for example, fine arts, furniture, antiques, jewelry) in a divorce case, the people involved should know that if two appraisers are used (one for the wife and one for the husband), the values will be considerably different. Even assuming that both appraisers are experts with top notch qualifications, there is always some divergence on value. If two appraisers are used, there are two fees involved. Depending upon how extensive the tangible personal property is, using two appraisers may be very costly.
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