Ralph has arranged and negotiated more private transactions and public sales of art in this time period than anyone in the United States. These sales and transactions, including sales of estates, purchases of collections, as well as work with Art Foundations, combined with his network of curators, art scholars, dealers, and shippers, makes Ralph E. Lerner one of the premiere art advisors in the world.
Ralph E. Lerner, art
advisor, is an advocate for saving taxes for individual art collectors on their
death.Perhaps the most extreme
example is Mr. Lerner’s victory on behalf of the Estate of Ileana Sonnabend.Ms. Sonnabend died in 2007 and at the
time of her death she owned the masterwork painting by Robert Rauschenberg
entitled “Canyon”. The Internal Revenue Service valued “Canyon” at $65 million,
yet Mr. Lerner was able to get the IRS to agree to reduce the value to zero for federal estate tax purposes.
Ralph explained that
the IRS estate tax regulations defines fair market value as the price at which
the property would change hands betweena willing buyer and a willing seller, neither being under any compulsion
to buy or sell and both having a reasonable knowledge of relevant facts. The
hypothetical sale must be in the market in which such property is most commonly
sold to the public.
The valuation issue
came about because “Canyon” contains the body of an American bald eagle – a
species protected by two laws, the 1940 Bald and Golden Eagle Protection Act
and the 1918 Migratory Bird Treaty Act.Under these statutes it is a criminal offense to possess, sell, barter
or otherwise deal in any manner with a protected Eagle, alive or dead.
Therefore, if the taxpayer sold the Rauschenberg painting to raise the money to
pay the estate tax on the $65 millionIRS valuation, the executors of the estate would be committing a
criminal act punishable by fine and imprisonment – not a good situation to be
The IRS argued that
there is a market for a masterwork like “Canyon” (be it an illicit market), in
other words, the IRS was looking to the stolen market place where it alleged
the painting might be sold.The
taxpayers argued that it was impossible to sell the painting given the legal
restrictions on its sale.
At the urging and
creativity of Ralph Lerner, a compromise was reached that benefited not only
the Sonnabend estate, but the general public as well.It was agreed “Canyon” would have a zero value for
federal estate tax purposes and hence, the estate tax on the painting would be
reduced to zero. The heirs of the estate agreed to donate the “Canyon” to the
Museum of Modern Art in New York City but not claim any income tax deduction
for the donation.
“Canyon” then went on display at MoMA and can be viewed by the general public
for years to come.
A result that Ralph has described as a “win win situtaton, everyone benefits.”