Annie Liebovitz and the suits

[Jeff Kubach]

As good she was I could't believe how much debt she was in!

Jeff

 

[eddym]

As good she was I could't believe how much debt she was in!

Jeff

Jeff, it just goes to show... no matter how much you earn, you can always spend more!

 

[Anton Lukoszevieze]

I like to think of Joseph Sudek trudging around Prague with his 8x10 (18x24), one arm too!!! That humbles me.

 

[johnnywalker]

I thought the "suits" bought the rights to her past and future work in return for pulling her out of her financial hole. This entailed certain obligations on her part which she is not fulfilling. Hence the lawsuit.

 

[Shan Ren]

My understanding is that a major part of the current problem is that when her partner Susan died she inherited the "matrimonial" properties, but as they were not a heterosexual couple she ended up saddled with huge inheritance taxes. Susan's son, however, was not taxed on his inheritance.

 

[Poisson Du Jour]

A string of upmarket properties, $3mill-plus a year and even more gold ducats from daily shoots, and she's in a "dire financial condition". But the horror in print is from the "high-end pawnshop: "Art Capital Group, produced a contract that appeared to show that Ms. Leibovitz agreed to allow the company to sell her homes and the rights to every photo she had ever taken." Ye Gods! That's what I call handing your life over. But what has this girl been getting up to? Most of us can only wildly dream of such wealth and influence and she appears to have been more than a little cavalier with financial management. That $24 mill is serious money in anybody's language and we are not really any wiser from the report as to what is going on. So now, here they come. Annie, get your guns out.

 

[nsurit]

Sometimes folks take responsibility for their circumstances. That usually results in them coming out better on the other side of a bad situation. Sometimes they blame others for their circumstances, abdicating their power to others. They generally learn nothing and given the chance, continue to make them same mistakes. My hope is she comes out better on the other side of this situation.

 

[polyglot]

I can't believe the anti-Annie pile-on in this thread where everyone just assumes she has been a wastrel. The situation is that she inherited a large quantity of property from Susan Sontag (her partner) but because the US does not recognise homosexual partnerships, this inheritance is treated as income. If she had inherited it from a dead husband, she would merely own the property, but instead she now owes about half of its value-at-last-sale to the IRS. We're talking about large, derelict buildings in (I think) NY that are not in saleable condition even if the real estate boom was on and are definitely not sellable right now.

If she sold the property, my understanding is that she would get less for them than the tax she owes on them, and this would not change the valuation as far as the IRS is concerned.

So before (well it's a bit late now isn't it?) we all get high and mighty and stand about waffling about how someone "prudent", let alone with such a large income, would never get into such a situation, ask yourself what, exactly, would you do in this situation? You have lost your life partner, who gifted you their property (of course you are the beneficiary of their will!) and because of your partner's gender, the IRS wants significantly more in tax from that property than the property is worth. Your move.

 

[c6h6o3]

what, exactly, would you do in this situation?

The first thing I'd do is hire a good attorney and appeal the assessment. The IRS should be using the true market value of the assets as their tax basis. They can't just make up a number. No matter what condition they're in, the price she gets for them is what they're worth. She pays the tax on that. If the inheritance doesn't add to her net worth after the estate is settled she needs better lawyers.

In any estates or trusts I've been involved with personally, the first thing both executors or trustees do is sell all real estate owned by the grantor. Then you know what value to place on it.

 

[removed account4]

another article in the times ,,,

http://www.nytimes.com/2009/08/02/f...d=1&adxnnlx=1249101059-xdSB09sQ54ozyKoHr99gDg

and the gawker.com
set of articles

http://gawker.com/5326608/the-coming-annie-leibovitz-fire-sale

 

[Steve Smith]

The situation is that she inherited a large quantity of property from Susan Sontag (her partner) but because the US does not recognise homosexual partnerships, this inheritance is treated as income.

Are you legally obliged to accept inheritance?


Steve.

 

[Michael W]

The situation is that she inherited a large quantity of property from Susan Sontag (her partner) but because the US does not recognise homosexual partnerships, this inheritance is treated as income. If she had inherited it from a dead husband, she would merely own the property, but instead she now owes about half of its value-at-last-sale to the IRS. We're talking about large, derelict buildings in (I think) NY that are not in saleable condition even if the real estate boom was on and are definitely not sellable right now.

There has been speculation on blogs and in news articles that Ms. Leibovitz’s financial problems arose because Ms. Sontag left her a large inheritance, with steep taxes due because the two women were unable to be legally wed.

But Mr. Rieff, the executor of his mother’s estate, said that all Ms. Leibovitz received from Ms. Sontag were sentimental items.

Susan Sontag's son says that she didn't inherit any property. I'd tend to believe him unless anyone can provide some solid edvidence to the alternative.

 

[BobNewYork]

Personally I'm not a big fan of the AL that I've read about as a person. However, I suspect she's been shafted because of her homosexuality. Seems like the proiperties inherited from Susan Sontag need a whole lot of repair to make them saleable. Susan Sontag died pretty much at the ludicrous peak of NYC real estate and it's the valuation at the time of death that applies for calculating estate duties. The IRS doesn't give a rat's how the real estate market changes - it's the valuation as of the date of death. Another thing - if an IRA or 401K is inherited, estate duties are levied on the face amount despite the fact that income taxes are payable on any withdrawal. BTW a non US citizen whose US spouse dies faces the same immediate demand for estate duty as a homosexual couple. Usually, an inheriting spouse may defer the estate duties which would be paid by the children upon the death of that spouse.

On the lawsuit, it seems strange to me that a company whixh lends against artwork has attached real estate. Even stranger is a contract which "purports" ! NOt sure if it's the reporting but I would have thought that a a contract either does or doesn't. Who knows?

In the end I don't particularly like her - but I feel very sorry for her.

Bob H

 

[Allen Friday]

According to the background articles, AL did not receive any real property from Sontag, only a few sentimental items. I think the whole, "they were homosexuals and therefore were treated unfairly" argument is a red herring in this case. While it is an important issue, it does not apply here.

 

[removed account4]

i don't really think her sexual preference has much to do with much ...
i am not expert, and i don't know anyone who even plays one on tv,
but i have a feeling, it is just poor money management, bad luck
( having to buy the adjacent townhouse when her construction people fouled a loadbearing wall )
and the recession ... who knows maybe she was involved in the madoff-stuff ..
seems like a lot of people lost a lot of money with that too ...

but then again, i am not an expert ...

 

[keithwms]

Sounds like she received some very poor financial advice and now finds herself in a very bad position. Unfortunately the same could be said of a lot of people- this economic downturn has forced a lot of people to show their hands and it sure isn't pretty.

 

[Sirius Glass]

Unfortunately the same could be said of a lot of people- this economic downturn has forced a lot of people to show their hands and it sure isn't pretty.

Even includes people who did everything right: 30 year fixed loan on a house bought over five years ago, six months income in savings in the bank and now out of work with the savings gone and unemployment running out.

Steve

 

[keithwms]

Best of luck Steve.

Doesn't it make you feel wonderful to know that 'stimulative' policies are now being put into action that encourage people to spend, spend, spend... when we all know very well that spending on overextended credit is what got us into this in the first place! It makes me feel so warm and fuzzy to know that I am now financing new cars for so many people and that all those sales are going to make our economy look so much better on paper!

Why don't you go buy a new car, it'll make you feel better

 

[wayne naughton]

Sorry to hear about Leonard Cohen.[/I] depressing isn't it....grin