Category Archives: Fine Art

Took home a drunk date, now 2 Warhol’s destroyed, WTF?

Drunk woman pulls on mans tie

First Date Horror Story.

Authorities say an intoxicated Dallas woman who was on a first date with a prominent Houston trial lawyer caused at least $300,000 in damage to his art collection, including two Andy Warhol paintings.

Lindy Lou Layman, 29, was arrested on criminal mischief charges after her date with Anthony Buzbee. She was released on $30,000 bond.

Prosecutors say Buzbee, 49, told investigators that Layman got too intoxicated on their date, so he called her an Uber after they returned to his home. Buzbee said Layman refused to leave and hid inside the home, when he found her and called a second Uber, she got aggressive.

Authorities said she tore down several paintings and poured red wine on some while yelling obscenities. She also allegedly threw two $20,000 sculptures across the room and shattered them.

The damaged Warhol paintings were each valued at $500,000 in court documents.

Buzbee has represented high-profile figures, including former Texas Gov. Rick Perry. Then-candidate Donald Trump also visited his home last year when Buzbee held a fundraiser.

 

Collector’s Policy cover these scenarios?

YES! Visit ARTINSURANCENOW.COM because our Collector’s policy covers damages while Art is in the home. How is a loss settled? A restorer or appraiser will evaluate the work to determine the current condition and decide If the art can be repaired or not. If not, payment is based on the schedule amount or the current market price, if it’s a blanket policy

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Visit www.ArtInsuranceNow.com to learn more, apply below or feel free to contact us at 1.800.921.1008

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Caution! Art Claims are Taxable, Read on.

Losing treasured items is traumatic enough, imagine being taxed for replacing them.

In an insightful article by leading tax professional Julian Block, the perils of being taxed on an Insurance claim for art that has appreciated are explained.

Using the received replacement value to purchase works of other types may not qualify you for the IRS’ “complete non-recognition of gain under the involuntary conversion rules”. This means you can be taxed.

Read the incisive article below and visit ArtInsuranceNow.com for comprehensive Fine Art coverages.

*The law authorizes an important tax break for a property owner who collects insurance (or other compensation) for property lost due to fire, theft or condemnation by a governmental authority. Ordinarily, you’re liable for an immediate tax on any excess over the cost basis of your property.

But a special rule permits taxes to be deferred if the proceeds are reinvested in similar property within the deadlines imposed by the IRS for replacement. For the “involuntary conversion” rules to apply, Code Section 1033 mandates that the replacement property has to be “similar or related in service or use” to the property replaced.

Understandably, words like “similar” lend themselves to different interpretations. Also understandable is that the IRS sometimes takes a hard-nosed approach.

Consider, for example, Letter Ruling 8127089. It held that oil paintings aren’t “similar” to lithographs so as to be eligible for involuntary conversion deferral.

The ruling dealt with a request for advice from someone I’ll call Irene Holmes. A fire in her home destroyed an art collection that included about 3,000 lithographs and a small number (about 1 percent of the entire collection) of oil paintings, pencil drawings, and wood carvings. A prudent Irene had insured the collection for its full current value. As current value exceeds her cost basis, a portion of the insurance proceeds represents gain.

Irene explained that she intends to use the proceeds from the insurance to purchase the replacement property. The replacements will consist of a mix of media — approximately 63 percent lithographs and 37 percent art works in other artistic media, such as oil paintings, watercolors, sculptures or other graphic forms of art — rather than reflect the composition of the lost artwork.

With that set of facts, the IRS “will not consider as property similar or related in service or use, art work in one medium, destroyed in whole or in part, replaced with art work in another medium. Therefore, in order to qualify for complete non-recognition of gain under the involuntary conversion rules,” the IRS spelled out what Irene has to do.

She “must purchase the same percentage of lithographs as were destroyed in whole or in part and the same percentage of art works in other artistic media as were destroyed in whole or in part.”

What happens if Irene decides to reinvest as proposed (63 percent in lithographs and 37 percent in other media? She’s going to be liable for taxes on the 37 percent of the proceeds that she reinvests in “other artistic media.”

Additional articles. A reminder for accountants who would welcome advice on how to alert clients to tactics that trim taxes for this year and even give a head start for next year: Delve into the archive of my articles (more than 225 and counting).

*Reprinted with permission from a Feb 20th, 2018 article by Julian Block.

About Julian Block

Attorney and author Julian Block is frequently quoted in the New York Times, Wall Street Journal, and the Washington Post. He has been cited as “a leading tax professional” (New York Times), an “accomplished writer on taxes” (Wall Street Journal), and “an authority on tax planning” (Financial Planning magazine). More information about his books can be found at julianblocktaxexpert.com.

Risk exposures such as natural disasters and unexpected events like fire, flood, earthquakes, and storms, can cause extreme damage. Protect your art investments by obtaining an art insurance policy by Art Insurance Now / Bernard Fleischer & Sons Inc.

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Visit www.ArtInsuranceNow.com to learn more, apply here or feel free to contact William Fleischer, CIC at 1.800.921.1008

Fire & Water, Devastates Artist’s Studio.

Commissioned Princeton University Artist’s studio destroyed by firemen’s overspray. Did her Artist studio policy cover her? No! and this is why.

She never bought one. If she did, all of her artwork in racks, stands, files, and on walls, is covered.  Her materials and tools are covered.  Even the reference library is covered.

I feel for artists that see financial hardship when there is a loss similar to this.

For $1,000 per year, your art is covered up to $100,000, not just in the studio but also in transit, at exhibitions and in storage, everywhere worldwide.

Follow our link at the bottom of this article and purchase an Artist studio policy today.

Art studios give artists the space they need to create as well as a way to store their completed works of art and sell art from the studio. Due to the nature of the work in an art studio, art studio insurance is essential. Risk exposures such as natural disasters and unexpected events like fire, flood, earthquakes, and storms, can cause extreme damage to the building and contents. Protect these risks by obtaining an artist insurance policy offered by Art Insurance Now / Bernard Fleischer & Sons Inc.

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Artist Studios Need Insurance Too

Many artists neglect to insure their practice because they mistakenly believe they’re already covered by a homeowner or rental policy—which are strictly limited in coverage to assets that aren’t considered part of a business. (Sorry, but at least in this case, your art, if it’s for sale, is considered a business.) Sometimes, insurance riders—essentially add-ons to a general policy—can be purchased to cover works of art or business practices, but an insurance brokerage like Bernard Fleischer & Sons Inc. / ArtInsuranceNow.com concentrates in the more complicated policies that art insurance typically requires. Our agency is experienced at navigating provenance and the complicated methods for valuating works of art and a familiarity with insuring studios and art collections.

 

Other artists hesitate with insurance because they’re unsure at what point a work of art is technically finished—at what point it stops being a conglomerate of a couple hundred dollars’ worth of material, and starts becoming a valuable “piece.” Fortunately, in this case, the insurance industry is largely unconcerned with such philosophical questions. Generally speaking, insurance adjustors will use an artist’s past sales to determine valuation. If you sold a similar painting for $1,000 (and can provide legitimate documentation), expect a valuation of about $1,000, unless you’ve started working with precious metals.

 

Certainly, the most tragic losses in the event of a disaster are those of human life. Second to that, for many people in the arts, are cultural artifacts. Therefore, it’s important to insure our cultural legacy. Meanwhile, insurance companies can feel very far removed from the arts—with their talk of “assets”—and scare collectors, gallerists, and, yes, even artists, from maintaining proper insurance coverage.

 

We at Bernard Fleischer & Sons Inc. / ArtInsuranceNow.com speak the language of the arts as well as insurance and can bridge the gap between the art community and the insurance industry to protect the legacies of the collector, gallerist, museum and artist.

Visit us at www.ArtInsuranceNow.com to learn more or call us at 800-921-1008 to speak with someone who can help with your particular needs.

Estate Planning And Affluent Art Collectors

Art collectors, are you properly estate planning? We can help. visit us at ArtInsuranceNow.com

Affluent art collectors are passionate about art. While they tend to expect their acquisitions to appreciate in value, they buy for personal and aesthetic reasons. Affluent art collectors are inclined to be extremely focused on acquiring and not very interested in disposing of art. This often means that at death they have amassed significant collections. What is surprisingly common is that many affluent art collectors do a substandard job of addressing their artwork in their estate plans.

Failing to plan for the disposition of collections upon death can prove quite costly to the family, as there is the potential to having to pay higher estate taxes. It can result in the unfair division of the art resulting in family conflict and litigation.

“Art is left to loved ones or other individuals, donated to charity directly, or in trust at the death of the collector. Proper planning means that the artwork is transferred to others very tax efficiently,” explains Frank Seneco, president of the advanced planning boutique Seneco & Associates. “Unfortunately, many times wealthy collectors have adopted the default option of not properly planning. For example, the collector is not sure which family members to leave which pieces to resulting in procrastinating and procrastinating until it’s too late. However, smart planning can often resolve these issues. One approach involves using corporate entities to own the art. This approach can not only address many ownership issues, it can simplify probate as there would not be the need to retitle the art.”

When dealing with meaningful and valuable collections, proper planning is more than constructing an estate plan. According to Evan Jehle, partner of FFO Business Management & Family Office, “Many of the ultra-wealthy have substantial art collections that they have not appropriately included in their estate plans. But, it’s more than just making sure the artwork is addressed in the plan. For example, with our clients we make sure they build files of ownership to make sure no questions arise concerning provenance. These files include certificates of authenticity, bills of sale, insurance records, and the like. A good rule of thumb is that the greater the distance between the collector and the artist and the older the artwork, the more likely there will be questions of provenance.”

Many wealthy individuals from business owners to celebrities do not construct effective estate plans. This is also true of a percentage of affluent art collectors. As in all these situations, by working with qualified professionals, the prosperous are able to ensure their wealth is passed on to whom they choose and done so while mitigating taxes.

Originally published Jan 08 2018, Forbes.com

Visit us at ArtInsuranceNow.com or contact William Fleischer CIC at 212-566-1881 Ext 111

Could buying art make you rich?

One man’s trash is another man’s treasure.

For one investor that dream came true. The painting ‘Salvator Mundi’ believed to be painted by Leonardo da Vinci purchased for £45 just sold for $450 million. So, is investing in art a good way to get rich quick? And how should you proceed? “with extreme caution” say financial advisors.

While stories like the recent Leonardo da Vinci sale and endless Antiques Roadshow episodes make it seem very attractive to invest in paintings and objets d’art, such cases are relatively rare. What you get back is based on supply and demand and there are big movements upwards or downwards if particular works or artists come in or out of fashion.

Attending a neighborhood garage sale or popping into a local thrift store can leave a lot to be desired. After sifting through dented furniture, chipped ceramics, and strange art, one is often left feeling that the presented merchandise is worthless. But if you are lucky enough, you may just find a diamond in the rough.

Some Top Garage Sale Finds:

  • $3 for a Ceramic Bowl, Sold at Auction for $2.2 million
  • Andy Warhol Sketch Purchased for $5, Valued at $2 Million
  • 50 Cents for a Painting worth $10,000
  • Tiffany Mirror Purchased for $2, Valued at $25,000

 

Photo of Salvator Mundi (Leonardo da Vinci)
Salvator Mundi (Leonardo da Vinci)

The high sale price of the Leonardo painting was not typical, a recent academic study, based on examining data from 1.2 million auction house sales of paintings, drawings and prints, concluded that art appreciated in value by a modest 3.97% per year, in real US dollar terms, between 1957 and 2007.

Given the current environment of low interest rates, that’s still a better return than many savings accounts will give you. Paintings are seen as attractive investments because it’s very clear what you’re buying. Part of this is driven by investors’ desire for “real assets”.

Many investors lost money in the financial crisis by investing in products they did not understand, they are turning back to things such as art. Wealthy clients spend an increasing part of their wealth on art and collectibles.

You don’t necessarily have to be super-wealthy to invest in art.

Affordable Art Fair photoThe ArtInsuranceNow.com sponsored 2017 Spring Affordable Art Fair was an excellent example of great works of art that are accessible.  There are a growing number of art fairs and online marketplaces such as Artfinder aimed at buyers with a more modest budget.

The Affordable Art Fair (AAF), which started out in London’s Battersea Park in 1999, now holds fairs in more than 10 cities around the world. But while it may be becoming more affordable, just don’t bet on becoming a millionaire yourself.

With a keen eye and a lot of luck you may come across a valuable find but most art industry experts suggest that you buy a piece of art because you like it, not because you want to get rich. “If it goes up in value that should be just an added bonus.”

Protect your valued finds by visiting us at ArtInsuranceNow.com, voted a 2017 Top Broker and listed as the “Cream of the crop” in our respective area of Art Insurance by Insurance Business Magazine. We can help with all Art related insurance requirements. Apply here or Contact William Fleischer CIC at 800.921.1008 to discuss your unique situation.

Art Insurance for Collectors; Schedule vs. Blanket

The Art of Collecting Art.

There’s a big difference between buying art and collecting art. Buying art is more of a random activity based on likes, preferences or attractions at any given moment while collecting art is more of a purposeful directed long-term commitment. An important step in good collecting is not the most delightful one to talk about, but it is among the most necessary, and that is to plan for the unforeseen.

As an art insurance broker, I readily come across collections that are an intricate part of retirement and inheritance planning.  It’s a great asset to pass down.  Baby boomers bought artwork for the love of the art.  Art as an investment vehicle was a small part of the decision-making, not like today which is the main focus.

In the past 15 years as the art market sales and demand took off, Art purchased 40, 30 or even 10 years ago is worth a lot.  Hence, I am seeing collector’s policy limits rise into the millions. I will explain some key differences in the type of policy offered in today’s marketplace. Art Insurance and collectible insurance demands are a new focus with some insurers. Beware, like the art world, no two are the same, read the exclusions, conditions and valuation clauses in a policy.

Understand what schedule means and its limitations, some say the maximum they will pay is what is on the schedule or schedule plus 125% or 150% and then some added or market value whichever is less.  A popular coverage is Blanket Insurance; usually, this is for the collection under $300,000. The advantage is that you are not required to supply the companies with appraisals, bill of sale or any other documentation when you bind the coverage.

Only at the time of loss, the onus of proof of value is on the collector.  This is not a lengthy process; either go back to your paperwork and ask for a current valuation from a dealer or show your work to a dealer and put the value in a letter. Both methods of either scheduling the art or using the blanket limit are tools I use when working with my clients.  Each person looks at insurance in different ways and has different requirements. Let me work with you and answer all your questions to present a program which is satisfactory to all those involved.

Visit us at ArtInsuranceNow.com to apply or Contact me at 800.921.1008 to discuss your unique situation.

William G. Fleischer CIC

Glass Artist Loses ‘Every Single Piece’ in Napa Valley wildfire; Our Exclusive Artist’s Insurance Policy Pays Off.

Napa Valley is typically a peaceful, relaxing place but not for Glass artist Clifford Rainey who lost his home, his studio and most of his work in the Atlas wildfire. The wildfires Fueled by powerful winds have scorched more than 200,000 acres including the beautiful homes of artists and collectors.

 

On Friday morning, Oct. 13, as Rainey surveyed the damage for the first time after his Mount George home and studio burned, said “Every single piece of artwork I own I’ve had since college was lost”.

 

Rainey’s life’s work is far from all lost. His work has exhibited extensively, featured in numerous public collections, including the Victoria and Albert Museum in London, the Corning Museum of Glass in Corning, New York, the M. H. de Young Memorial Museum in San Francisco, and the Los Angeles County Museum of Art, as well as in the permanent collections of the Museum of Arts & Design, New York, Museum of Fine Arts, Boston, the Irish Museum of Modern Art, Dublin, and the Montreal Museum of Fine Arts.

 

The emotional value cannot be replaced but having an artist’s policy to cover financial losses prevents having to start from zero. Our Artist Insurance Policy is designed for the active Artist. Your Art is covered while in the Studio, in Transit, while at Exhibitions and when in storage along with Your Materials, tools and reference library.  No more worrying about, Theft, Fire, Water Damage or Vandalism. These coverages and more are covered in our Artist Insurance Policies.

 

For more information or to discuss your particular situation contact me, William G. Fleischer CIC | Principal.  T: 212 566-1881 ext.111 or visit us at www.artinsurancenow.com to fill out a quick EZ application for a fast, free quote.

Artist’s Nightmare at the Museum

Museum in the dark pictureJust imagine, you are an artist without an Artist Insurance Policy and you finally get an exciting call from a museum to tell you that they have chosen your work for an exhibition for several months.  You work extremely hard on creating the exhibit and receive a contract from the museum that says they will insure your artwork while it is on display. A friend from out of town visits and you take them to see the exhibit and notice your prized sculpture in the exhibit is damaged. Immediately, you contact the museum and call for a plan of action; you ask to see the security footage and request more information about submitting the insurance claim. The museum seems uncooperative, explains to you the security cameras aren’t operating, there isn’t any evidence to support your claim the sculpture was damaged while on display and there is no insurance information they can provide for you at this time. You continue to push for an insurance claim, the museum continues to be evasive and you feel like you are getting nowhere. It looks as though the museum is not going to submit a claim on your behalf and the repairs will cost an enormous amount of money and numerous hours of your time.

This is a real-life insurance horror story from cases that the Philadelphia Volunteer Lawyers for the arts (PVLA) have heard over the years. Unsurprisingly, insurance disputes are a common occurrence with PVLA arts clients. The underinsurance of artwork presents artists with various problems which are much more commonly associated with their profession than others. Another unique problem with the underinsurance of artwork is with its valuation. Artwork is often not treated with the same financial diligence as other assets because it can be difficult to place a value on it and can cover a broad range of items including paintings, sculpture, architecture, printmaking, digital graphics, ceramics, collage, photography, statuary, textiles, art glass and other decorative items.

Insuring fine art presents challenges that are not encountered with other types of real property; an experienced art insurance broker like Bernard Fleischer & Sons (ArtInsuranceNow.com) can address these problems and provide an art insurance policy with coverage fitting the particular situation. Our artist insurance policy values your art at market value less a percentage. The policy covers your art anywhere in the world, while at exhibitions, galleries, storage and in the studio including transit, materials and tools. Art insurance buyers require the services of knowledgeable insurance professionals because “It’s a different type of insurance”. With most insurance you are just buying a financial promise, any insurer knows how to fix a roof or rebuild a building but with art insurance you are buying knowledge as well. Bernard Fleischer & Sons (ArtInsuranceNow.com) are leaders in appropriately insuring artists, art dealers, collectors, conservators, galleries and museums. For more information visit our website, call 1.800.921.1008 or fill out an application here.

As Art Basel Miami 2016 approaches, we look at the necessity of a good art insurance policy.

artbasel-miami-beachArt Basel, the international art fair with three shows staged annually in Basel, Miami Beach and Hong Kong. The shows offer parallel programming produced in collaboration with the host city’s local institutions. Art Basel provides a platform for galleries to show and sell their work to collectors, museum directors and curators. The 2015 show in Miami presented 267 leading international galleries from 32 countries. Over five days the show attracted 77,000 visitors including private collectors and directors, curators, trustees and patrons of nearly 200 museum and institution groups. The show hosted first-time collectors from Cambodia, Ethiopia, Nicaragua, Romania, Togo and Zimbabwe. That’s a lot of art moving around and collectors Art policies should cover Art, when purchased, on consignment and in transit, it’s about knowing your coverage situation before it’s too late.

art-basel-miamiThe transportation of art is a tricky thing, and as fine art transportation insurance leaders we can tell you exactly what you require to know so that your insurance program will be effective and  cover you properly.  Insurance coverage during transportation, installation and exhibition of irreplaceable works of art, antiquities, and memorabilia isn’t optional and the best way to obtain the finest coverage is to visit artinsurancenow.com or call us at 800.921.1008 to speak with a knowledgeable fine art broker that can advocate for you in seeking the best possible insurance terms.

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