Why would someone pay almost $180,000,000 for a single painting?

I have a friend, she opened a perfume shop many years ago, that one Shop is now a chain of shops across Spain and Andorra.

She also opened another store, under another name some years ago, this "other store under another name" is also a chain, which sells the same perfumes just a little cheaper.

Yes, she created her own competition.

When they buy they perfume a little cheaper thinking they're getting a bargin and not paying the price of the first Shop, Joe públic is still paying her and they don't know it.

I think its whats happening here, they are buying and selling between themselves to hype up market prices.

180 million , hmmm to add a bit of perspective it would only take the average person in Malawi 659,340 years to pay for it , that is if all his income was disposable .

a reply to: JohnnyCanuck

Even Picasso bodies where breasts and ears switch places?

a reply to: Witness2008


Art and excellence is all very well and good, yes Piccaso's are really lighting our world up with their creative expressions.

But 180 Million for such art is simply ridiculous, no matter how rich you are, who you think you are, you must be absolutely crazy and selfish. 180 Million can be better spent than on a piece of art which I am not saying is worthless, but certainly not worth anything in the millions.

Either it is money laundering, or the person who bought it is clinically insane.

Humans are starving everyday because they have no food no money no shelter, but other human beings are fine to spend 180 Million on a piece of canvas just to hang up on some wall when you could feed millions of starving children with that money.

Clearly you seem to be fine with this. You would rather Art and such excellence was appreciated, and paid ridiculous sums for.

As a human being you should be denouncing such actions.

you asked = Is it really "an investment"? Or, is it something else entirely?

I gave you an answer already and you brushed it off. Could it be an investment? If it is then it is most certainly a selfish investment to benefit only one person or a select few people, certainly not the type of investment to raise money for a charity or to feed the starving children around the world.

a reply to: ISeekTruth101

This was an anonymous purchase. I would not even attempt to read motive into this art deal. I for one would love to be the care taker for such a masterpiece. I suppose I don't live in a world where I have the need to malign an unknown person simply because he or she is wealthy enough for such extravagance.

I believe I found the answer to the question: "Why would someone pay $180,000,000 for a single piece of art?" I knew it wasn't all about "the LOVE of art". 1031's baby!

Many works of art and collectibles have appreciated significantly in value. Internal Revenue Code (IRC) Section 1031 permits tax deferral on the sale of artwork provided the investor adheres to the Treasury Regulations and IRC rules and timelines.

Investors with private art collections held primarily for investment or for use in their trade or business can defer 100% of their capital gain tax liability if they exchange one art collection or a single piece of artwork for another. Examples of qualifying personal property may include many different types of art as long as the investor is able to substantiate that such property was purchased and held primarily for investment purposes or use in a trade or business. This is often the case with fine art and collectibles held for appreciation.

The types of personal property that may qualify for a 1031 tax deferred exchange may include: fine art, sculptures, prints, collector coins, precious gems, antiques, classic automobiles and many other collectible investment assets.

The obvious benefit of exchanging artwork is that the investor does not have to pay the 28% capital gain tax that would otherwise be due on the sale of appreciated artwork. An investor who displays his collection in his place of business may be able to substantiate that it is held for use in a trade or business.

Article

originally posted by: Cauliflower
a reply to: ImaFungi

There are a lot of starving artists out there on the streets barely able to survive.
What would have happened if Omar Khayyám had to sell pot to keep food on the table?

Picasso was himself a starving artist, he sold some while he was alive, but he went through some very serious bad spells.. painting was not able to support him, most of his life.

Everyone knows you have to be dead to sell your work!



PS. when I die... everyone line up for purchases please.. my son and hubby will love you for it!

a reply to: queenofswords

So it essentially boils down to legal tax evasion with a loophole provided by the IRS itself. Funny, someone can go to prison for evading paying even a ten dollar tax bill. Yet, a rich person can avoid paying millions in capital gains tax and get away with it legally.

Awesome how that works.

originally posted by: EternalSolace
a reply to: queenofswords

So it essentially boils down to legal tax evasion with a loophole provided by the IRS itself. Funny, someone can go to prison for evading paying even a ten dollar tax bill. Yet, a rich person can avoid paying millions in capital gains tax and get away with it legally.

Awesome how that works.

Did you read the whole article? It's really quite interesting and thought-provoking. And...legal!

a reply to: queenofswords

I did read it, and it's insane.

Assume an investor is selling a Renoir for $2 million that was purchased for $500,000 and thus has $1.5 million of gain. After the investor consults with her tax advisor, she determines she will owe approximately $420,000 in capital gain taxes based upon the 28% capital gain rate for the sale of the Renoir absent a 1031 exchange. However, if she sets up a 1031 exchange before closing on the Renoir sale, all of the capital gain taxes can be deferred. This leaves the investor with $2 million of equity and she would have $2 million to reinvest in other artwork, rather than $1,580,000 after-taxes, thus maximizing her purchasing power and having the benefit of future appreciation in value on the full $2 million.

Avoid the capital gains tax so long as you reinvest in more art that's most certainly going to appreciate in value. Avoid the tax, and get richer. There is even a stipulation that allows a person to bypass the rules in the 1031 completely by using a "reverse exchange". A loophole for a loophole.

I'm just astounded.

a reply to: EternalSolace

There is probably a very closed group of these "art" people that "sell" to one another all the time.....you know what I mean? I am really curious now. Too bad most of these "art lovers" are anonymous.

I do want to interject my opinion on the tax issue, however. I do not believe in capital gains taxes. I think they should be done away with. My opinion is that the profit made off the sale should be taxed at the regular rate.

if i was a billionaire or a multi billionaire like that saudi sheik that collects cart i would do it to.

i would buy up as many paintings, books, and instruments i could get my hands on.

i would love to have a library full of rare books and first editions. i would love to have a room with nothing but 'deviant' art and a stradavarius and many other instruments would be a must have.

i would buy them and fill my house with them and then buy more.

a reply to: AutumnWitch657

Even Picasso bodies where breasts and ears switch places?

That is kind of a frightful symmetry.
Like a card game where breasts and ears are "wild" cards that can be used either way?
That does compliment the single door allegory a little.
In other games standing in front of a king indicates you are the son of a king.