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Salvator Mundi and the unreality of the art market

the-tls.co.uk

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Re: Salvator Mundi and the unreality of the art market

#11

Post by okmokmz »

odyssey7 wrote: post #6
Swenrekcah wrote: post #3

Earlier quoted context omitted.

A huge payment for a piece of art is also a convenient way to legitimately pay for goods or services that you don’t want to be assoicated with.

Eh, kind of. If buyer A is trying to obfuscate transmitting $100 to the seller, and the painting would normally sell at auction for $7, then somehow buyer A needs to boost the auction sale price up to $107. I’m not saying that it can’t be done - just that for the paintings that do sell for over a hundred million dollars, there usually really are people and organizations at the auctions who believe the paintings are w…

This is a huge oversimplification, and it would be trivial to "boost the auction sale price up," just have other people bid as well

Re: Salvator Mundi and the unreality of the art market

#12

Post by stanfordkid »

The cheat code:

— buy painting for $5 million

— have a museum value it at $15 million a few years later

— donate painting

— write off $15 million in taxes for a charitable contribution

Clearly the museums have an incentive to fudge the numbers for rich donors.

Re: Salvator Mundi and the unreality of the art market

#13

Post by dondawest »

okmokmz wrote: post #11
odyssey7 wrote: post #6

Earlier quoted context omitted.

Eh, kind of. If buyer A is trying to obfuscate transmitting $100 to the seller, and the painting would normally sell at auction for $7, then somehow buyer A needs to boost the auction sale price up to $107. I’m not saying that it can’t be done - just that for the paintings that do sell for over a hundred million dollars, there usually really are people and organizations at the auctions who believe the paintings are w…

This is a huge oversimplification, and it would be trivial to "boost the auction sale price up," just have other people bid as well

Exactly. Reserve buyers exist for exactly this purpose

Re: Salvator Mundi and the unreality of the art market

#14

Post by dondawest »

stanfordkid wrote: post #12

The cheat code: — buy painting for $5 million — have a museum value it at $15 million a few years later — donate painting — write off $15 million in taxes for a charitable contribution Clearly the museums have an incentive to fudge the numbers for rich donors.

Yes, a museum director is fundamentally a tax guy. They’re not paying for the work that gets “donated,” so a museum director is a negotiable third party who is highly willing to appraise works at values the Donor suggests.

The incentive for the Museum to inflate the value of the work that gets donated to them is inflating the supposed value of their holdings. The incentive for the Donor is tax evasion.

OH WAIT I meant “tax avoidance.”

Re: Salvator Mundi and the unreality of the art market

#15

Post by stanfordkid »

dondawest wrote: post #14
stanfordkid wrote: post #12

The cheat code: — buy painting for $5 million — have a museum value it at $15 million a few years later — donate painting — write off $15 million in taxes for a charitable contribution Clearly the museums have an incentive to fudge the numbers for rich donors.

Yes, a museum director is fundamentally a tax guy. They’re not paying for the work that gets “donated,” so a museum director is a negotiable third party who is highly willing to appraise works at values the Donor suggests. The incentive for the Museum to inflate the value of the work that gets donated to them is inflating the supposed value of their holdings. The incentive for the Donor is tax evasion. OH WAIT I mean…

It gets even crazier — there are people literally buying new paintings at higher prices to inflate the value of existing holdings. So let’s say you buy 3 Vassarely’s @ $200k each (or insert semi-hot artist here). You wait 4 years and have someone else buy a 4th Vassarely piece for 3x that price point. Now you use the inflated value for that single piece as a comp for the other 3 pieces that will then be donated. Art market reps basically find ways to facilitate these types of things.

This is why you always see wings of museums named after rich folks.

Re: Salvator Mundi and the unreality of the art market

#16

Post by [deleted] »

stanfordkid wrote: post #15
dondawest wrote: post #14

Earlier quoted context omitted.

Yes, a museum director is fundamentally a tax guy. They’re not paying for the work that gets “donated,” so a museum director is a negotiable third party who is highly willing to appraise works at values the Donor suggests. The incentive for the Museum to inflate the value of the work that gets donated to them is inflating the supposed value of their holdings. The incentive for the Donor is tax evasion. OH WAIT I mean…

It gets even crazier — there are people literally buying new paintings at higher prices to inflate the value of existing holdings. So let’s say you buy 3 Vassarely’s @ $200k each (or insert semi-hot artist here). You wait 4 years and have someone else buy a 4th Vassarely piece for 3x that price point. Now you use the inflated value for that single piece as a comp for the other 3 pieces that will then be donated. Art…

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