Leon Black, a board member at New York’s Museum of Modern Art (MoMA), used a tax clause to dodge paying capital beneficial properties taxes on dear artwork dealings involving disgraced financier Jeffrey Epstein, in line with a latest New York Times report. The artwork dealings are at the moment being investigated by a Senate committee as a part of a probe into the non-public fairness mogul’s connections to Epstein.
In February 2021, over 150 of artists and cultural figures signed an open letter, first printed in Hyperallergic, urging MoMA to chop ties with Black. A month later, he stepped down from his place as chairman of the board; nevertheless, he stays a trustee on the museum.
On November 23, 2016, Black offered “Figure Moyenne II” (1947), a bronze sculpture by Alberto Giacometti from his huge non-public artwork assortment, for $25 million to the Haze Trust, an entity managed by Epstein, in line with paperwork reviewed by the New York Times. At the time, Epstein was a registered intercourse offender. The similar day, an organization tied to Black allegedly used the earnings from the Giacometti sale to amass Paul Cézanne’s watercolor portray “Portrait de Vallier de Profil” (1906) for $30 million.
This deal was structured as a 1031 exchange, otherwise known as a “like-kind exchange” — a instrument that enables an investor to postpone paying capital beneficial properties taxes on the earnings they make from a sale in the event that they reinvest the proceeds into the acquisition of one other related asset of equal or larger worth, in line with the Internal Revenue Services. With the 2017 passing of the Tax Cuts and Jobs Act, this tax incentive now strictly applies solely to exchanges of actual property, and like-kind exchanges of property reminiscent of art work and collectibles not qualify for this tax loophole.
In one other occasion, one in every of Black’s artwork firms reportedly offered Georges Braque’s oil portray “Le Guéridon” to Epstein’s Haze Trust for $5 million. Again, these earnings have been equally rolled over to buy one other unnamed Cézanne portray.
Sloane & Company, a public relations agency contracted by Black, offered the next assertion: “The New York Times reporting confirms the Dechert Report’s public findings greater than two years in the past that Mr. Black paid Epstein for professional monetary advisory companies. The 1031 exchanges used in this 2017 artwork transaction have been fully authorized and acceptable.”
MoMA has not replied to a number of requests for remark.
These dealings are at the moment being scrutinized in an ongoing investigation by the Senate Finance Committee into Black’s monetary connections to Epstein. Beginning in June 2022, the probe has to this point “uncovered serious tax issues and other concerns with trusts and structures Black executed to avoid over $1 billion in future gift and estate taxes,” the committee reported.
On July 25, Senator Ron Wyden of Oregon, the Democratic chair for the Senate Finance Committee, despatched a letter to Black asking for an evidence behind the huge funds to Epstein, and expressed the committee’s considerations about “whether such payments were properly characterized as income or gifts for tax purposes.”
With a large artwork assortment reportedly valued at $1 billion, Black has to this point refused to offer Senate investigators with any solutions or proof that might justify the $158 million he paid Epstein for a wide range of tax and property planning companies between 2012 and 2017, the committee reported in July. These companies embrace recommendation Epstein offered to Black relating to his non-public artwork assortment.
This investigation additionally follows a lawsuit filed in July accusing Black of sexually assaulting and raping a teenage lady in Jeffrey Epstein’s New York townhouse, accusations that the MoMA trustee has denied. That similar month, the New York Times additionally reported that Black struck a $62.5 million settlement deal with the US Virgin Islands in order to keep away from potential future prices associated to the territory’s investigation into Epstein’s intercourse trafficking ring.
