Also, the IRS has challenged blockage discounts applied by taxpayers to collections of artworks,
Since that decision in 1975, the Service or the Tax Court has recognized blockage discounts of artworks for gift tax purposes (Calder v.
The concept of a blockage discount in art is borrowed from business valuation.
County Surrogate's Court 4/14/94)] a total value of $391 million for the artwork based on different blockage discounts than the opposing experts had used.
Specifically, the Tax Court, not wanting to make Smith's estate endure the consequences of a "forced" sale, allowed a 37% blockage discount, which, essentially.
Many contributing factors enter into this blockage discount, based somewhat on a sense of supply and demand.
This value was derived by applying a 75% blockage discount to the individual appraised values, which totaled nearly $73 million.
1504-4(b)(2)(iii) provides that, for purposes of the 80-percent of value test generally (as well as in the case of options treated as exercised), all shares of stock within a single class are considered to have the same value and, hence, control premiums and minority and blockage discounts within a single class are not to be taken into account.
Although TEI appreciates the desire to craft a rule that is comparatively easy to administer, we question whether the wholesale disregard of control premiums and minority and blockage discounts is supported by sections 1504(a)(2)(B) and 1504(a)(5)(B).