In a recent case, it seems a painting was valued by Sotheby’s at $500,000 and that was the value given to the IRS. However, four years later, the same painting sold at auction by Sotheby’s for $2.1 million.
The appraiser explained that the primary reason for the discrepancy was that Russian collectors bid the piece up, since they are attempting to get their hands on artwork.
The judge did not believe that and instead determined that Sotheby’s had intentionally low-balled the appraisal value to curry favor with the estate, so the auction house would be used when the painting was later sold.
