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When you sell a collectable you pay the 28% to the IRS. If you sell an inherited painting for $10,000, you owe the IRS $2,800.00. There are several legal ways to avoid this.

A full service appraisal company, like Chicago Appraisers Association, can work with your family attorney and advise you on minimizing this through strange sounding things like:

  1. Charitable remainder trusts
  2. Irrevocable trusts
  3. Flip unitrusts
  4. Remainder - Purchase charitable trusts
  5. Private foundations
  6. Multigenerational Dynasty trusts
  7. Family Limited Partnerships

Museum donations of lesser and less favorite art/antiques can often offset estate taxes on better items.

An experienced appraisal firm, like Chicago Appraisers Association, can help you understand all this "mumble-jumble". We can provide you with an accurate value so your tax planner will know which vehicles are best for you. We can even suggest simple tax strategies like purchasing an extra life insurance policy to pay your estate tax so your heirs aren't forced to sell anything. We can even be an impartial referee for the equitable division of art and antiques. Four paintings divided upon four children does not mean each gets a painting. One painting may be worth more than the other three combined. Sets of antique chairs and silver should not be broken as the group value is lost.

Figure 1: Estate Exemption and Tax Rates

Calendar Year Estate Exemption Amount Estate Tax Rates
2006 $2 million 47%
2007 $2 million 47%
2008 $2 million 47%
2009 $2 million 47%

 

Figure 2: Estate Tax Liabilities

1998-2013
Taxable Estate Federal Estate Tax
$3 million $705,000
$5 million $1665,000
$10 million $4,065,000
$25 million $11,265,000
$50 million $23,265,000

After over 38 years experience, we pride ourselves not to be just number providers, but solution providers. Please phone or have your tax consultant call us. We are a complete art appraisal service.


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