Having your collection of art appraised for more than it's worth doesn't sound like a bad thing, until you consider the taxes you will have to pay on it. That's the problem that Jean-Michel Basquiat's family has to deal with now as the IRS has allegedly overvalued the late artist's work by $66 million and wrongfully hit them with an additional $10 million in taxes and penalties. Discrepancies between Sotheby's appraisal and a government audit of the family's extensive collection (over 1,300 paintings and works by Warhol and others) as well as issues with the death taxes collected after his mother Matilda died, have resulted in the complicated lawsuit filed by Basquiat's father, Gerard, who has also since passed away.
The lawsuit is still scheduled to head to court in April of 2014 on behalf of the family. According to DNAInfo, they are arguing for a blockage discount, which the site defines as "a legal concept in which an estate claims that the sale of its artwork all at once would flood the market and significantly depreciate the value of each individual piece." With the popularity of Basquiat's work and the steady increase in auction prices these days, it is unclear if the family will win, but time will tell.
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[via DNAInfo]
