Feburary 2016
February Insights
As I was reading one of this month’s informational articles, The Tax Value of Fine Art, I was reminded of a situation that I was involved with when I first began my trust career many years ago in New York City as a trust administrator at a major city bank. 

One of our clients died who lived in a three-story apartment overlooking Central Park. A responsibility of the administrator was to arrange for an appraisal of the contents of the apartment which encompassed a vast amount of antiquities of all sorts. The appraisal was completed and one of the beneficiaries of his estate wanted to purchase a small obscure painting that was given a nominal value by the appraiser. The beneficiary pestered us to no end for this painting that, in turn, sparked some curiosity by the senior officer in charge of the estate. He decided to have someone from one of NYC’s most prestigious auction galleries look at the painting. Sure enough, it turned out to be an uncatalogued painting by a French Master. You think the beneficiary knew something? Needless to say, the beneficiary never purchased the painting.

After Punxsutawney Phil emerged from his cage on February 2nd, the Groundhog Club Emcee proclaimed, "There is no shadow to be cast! An early spring is my forecast!" As I sit here watching the snow fall, I can only hope he is right.


Below are a few articles which we hope you find useful. Let us know your thoughts and reach out with any questions. 
Tax Exile

Rock star David Bowie died of cancer in January at age 69.  According to a recent account in TaxNotes, Bowie became a tax exile in 1972.  At that time, he had accumulated U.S. and California tax debts of some $300,000.  As England then had a top marginal income tax rate of 83%, that also was not very inviting.  Bowie’s wife at that time, Angela, had been educated in private schools in Switzerland, so she suggested that they explore relocating there.  Learn More.
Changes to Social Security benefits  

Social Security benefits in 2016 will be affected by actions and decisions made in Congress and the U.S. Supreme Court in 2015. In Obergefell v. Hodges, the Court held that same-sex couples have a constitutional right to marry in all states. That also means that, if such couples do marry, they have the right to be treated as spouses for tax and Social Security benefit purposes. Accordingly, spousal and survivorship benefits will become available to same-sex married couples. Learn More.
The tax value of fine art   

Bernice Newberger died in July 2009.  Her estate included three valuable pieces of art, for which it obtained appraisals from Sotheby’s and Christie’s. The valuation was complicated by the fact that the market for fine art took a steep dive in 2008, as the economy slipped into recession.  For example, in October 2008, some 44% of pieces put up for auction failed to attract minimum bids, double the rate of a year earlier.  They had to be returned to their owners.  In 2009, Sotheby’s revenue declined by 53% and Christie’s by 46%.  Bernice’s death came at the trough of the slump.  Learn More.
Because of the rapidly changing nature of tax, legal or accounting rules and our reliance on outside sources, Garden State Trust Company makes no warranty or guarantee of the accuracy or reliability of information contained herein nor do we take responsibility for any decision made or action taken by you in reliance upon information provided here or at other sites to which we link. © All rights reserved. 
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