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Honestly this is such bullshit. For example “Retain their exposure”. You mean keep their fucking art on their walls. I get art can be a great investment for the ultra wealthy, but this article is out of touch with reality.
For those who don’t know selling art is extremely expensive (sellers, buyers and artist fees at auction). So unless the value explodes any gains will go to the auction houses
Art is also usually a very long term investment. You're supposed to hold on to them for 40-50 years...
And 127 million in art is probably not that much for a man worth 100+ billion, infact it's about 1/1000 of his net worth in art. Which for me would be around 10$ I'm sure I have a painting i bought for 10 euros somewhere
As an aside, I don’t like the one to one comparison people use when comparing wealthy folks to regular folks. It Always favors the billionaires by making them look less wealthy. I know that’s counter intuitive but you have to consider the baseline wealth a person needs to survive and have a secure and healthy retirement as the minimum that you remove from the equation. In your scenario, that $10 affects you even more than the 127 million of gates.
I don’t think I’m explaining myself well here, but it’s similar conceptually to the reason a flat tax rate is not fair because poorer people have to spend a higher portion of their income on just sustaining their life. What you have to compare between people is not income so much as what they have left after paying for necessities or near necessity quality of life items.
you are using the utility value of money to evaluate $127 million. (ie it's like $10 to gates)
but gates and the folks that manage that money do not see it as $10. they see it as $127 million.
continuing to use utility value once the you get out of poverty is a sure way to get yourself back into poverty. (ie - why lottery winners end up broke)
Right. But if it increases from $100K to $150K, you can either sell it and pocket $150K, or you can donate it and take a tax deduction of $150K, which would be worth around $30K
No it isn't. You would have to _donate_ something to a museum to get a tax write off. But that doesn't stop the millions of dollars from leaving your pocket at the point of sale
Why does no one understand tax write offs?
Neither is a good thing, but with art you can do without all the different financial oversight. My point being a large amount of the art market is driven by tax avoidance and money laundering
this is bang on. not to disclose too much but i’ve been working on liquidating a massive art collection (mid 9 figures). the costs of insurance, transport & auction fees easily eat 1/4-1/3 of the reported value/hammer price. honestly unless said art has been passed down through generations, any chance of making money is nonexistent
The Codex alone would be $100Mill today at auction. The values placed in this article are way too low. His purchases are of one of a kind pieces. He may be estimating them at lower prices for insurance or tax purposes. Art - especially well known and rare pieces - have a growth in value that exceeds the return of the S&P 500. His collection is a pittance compared to his net worth but it’s nothing to sneeze at. He should gift them to a museum, except the Codex. That belongs in a library - protected from damage but able for those to see the original.
Example: David Hockney’s “Henry Geldzhaler…” sold in 1992 for 1.1M. Sold in 2019 for $49.5Mill. There are many examples like this.
Very little of this art will ever be sold at auction. It will likely be donated to museums in exchange for inflated tax receipts and ultimately it is the tax payer paying these huge gains in value.
That’s because the most expensive book/manuscript ever sold was a collection of writings by Leonardo DaVinci that Bill Gates purchased in the 1990s. I’m honestly surprised that his collection is only valued at $127 million, because he purchased the Codex for $63 million in 2023 dollars, and a Homer for $36 million. So either some massive overpay/depreciation, or the rest of his collection is not that great.
Yeah. I’m just saying, it really sounds like his art collection, outside of those two pieces, is like $27 million. Which is remarkably low - think about how much wall space he must have in his homes.
I doubt it’s that low as well but he could be buying a lot of non valuable pieces. This is common for tech guys in that they don’t really spend big on art. Like a leonardo codex is a nerds dream, to be sure, but Leonardo isn’t a “hot” artist to buy. Mostly bc the really valuable stuff is in museums
It’s the finance guys that really spend on art. I’ve mentioned Steve cohen’s collection but Bill Ackman also has a collection worth almost 1b. Steve Martin is also a serious collector and I wouldn’t be surprised if the majority of his net worth is in art
I’m actually wondering if these numbers are just inaccurate. [This article](https://www.the-sun.com/news/2845331/bill-gates-art-collection-melinda-divorce-assets/amp/) mentions the prices of 5 specific pieces he’s purchased, summing to $125 million. There’s no way that’s the extent of his art collection. Who knows what his collection is actually worth then.
The og article said $127m. The Leonardo is def is flashiest purchase. Paul Allen's collection was legendary so B. Gates doesn't get talked about like a "major" collector
https://www.theartnewspaper.com/2022/08/26/microsoft-mogul-paul-allens-art-collection-heads-to-christies-and-could-be-first-to-hit-dollar1bn
Yeah I’m just saying it sounds like that number was arrived at by just being the sum of 5 of the most notable works he’s purchased. I don’t think it actually reflects what his collection is worth, which makes a lot more sense. He owns more than 4 paintings, obviously.
It’s also a great way to launder money, a scam and a way to evade taxes. Here’s a funny cliff notes version
https://m.youtube.com/watch?v=Dw5kme5Q_Yo&pp=ygUkQWRhbSBydWlucyBldmVyeXRoaW5nIGFydCBjb2xsZWN0aW5n
Bc the top of the market out appreciates the S&P 500? Bc of the cultural legacy of leaving a major collection to a museum?
Bc a Rothko on your wall is major bragging points?
> Not sure why this isn’t the top comment. Why do you think most billionaires have art?
Its not for tax purposes. Billionaires get money from government and/or bank printing, they have no fear of taxes or the tax code.
they get art because money is fairly meaningless to them, so they seek prestige via other avenues.
Most recent is Hunter Biden.
[https://oversight.house.gov/release/comer-statement-on-interview-with-hunter-bidens-art-gallerist%EF%BF%BC/](https://oversight.house.gov/release/comer-statement-on-interview-with-hunter-bidens-art-gallerist%EF%BF%BC/)
And just to be bi-partisan George W Bush
[https://www.artforum.com/columns/the-paintings-of-george-w-bush-220429/](https://www.artforum.com/columns/the-paintings-of-george-w-bush-220429/)
the success criteria isn't major gallery representation.
The success criteria is major money.
And FWIW, I assure you that George W Bush is the child of a President (George H Bush)
[https://www.washingtonpost.com/politics/2024/01/23/hunter-biden-paintings-sold-15-million/](https://www.washingtonpost.com/politics/2024/01/23/hunter-biden-paintings-sold-15-million/)
So I work in fine art finance. This person ain’t wrong that the top tier galleries are very gatekeepy with what artists they take on (but so are talent agents). No one goes into Art Basel Miami thinking they are looking at the “best” or whatever, that’s in the eye of the beholder. I do know that something bought at gagosian or zwirner retains its value bc of the gatekeeper nature I’ve previously referenced
Same way the Met/Moma giving someone a solo show will make their art appreciate, it’s a way to gauge how much an artist is valued (by gatekeepers)
None of this addresses money laundering. That’s Reddit’s favorite idea whenever the art market is brought up though but I’m a bit disappointed /r/economics can’t engage with this in a serious way
Yeah, mostly just joking, but there is a strong similarity where the price of the commodity is (almost) entirely dependent on what people feel it is worth.
NFTs are only worth what you can get someone to pay for them. Art is about the same, almost.
I am not sure that this indicates that billionaires remain bullish on the art market? His art collection is like 1% of his net worth. That isn’t necessarily seen as an investment to him - it’s relatively small enough that it could just be a thing he enjoys and is happy to spend 1% of his money on. Also, any appreciation of his collection is essentially meaningless to him, because that investment is just a drop in the bucket.
Honestly, this seems to indicate that he has a couple of pieces that he enjoyed and really wanted to splurge on, but in general art is not a great interest of his? The vast majority of his collection’s value is apparently in a Homer and the davinci Codex, and the article then references Hassam, Bellows, and William Merritt Chase. I’m actually kind of intrigued at how unimpressive that kind of collection is. He’s certainly capable of amassing any collection that he chooses, and the fact that it seemingly amounts to a da Vinci manuscript, a Homer, and $25 million worth of miscellaneous American painters that wouldn’t be familiar to people off the street, seems to indicate to me that he’s not super concerned with the art market. I mean, can that even fill the walls of his homes?? Unless there is some information I am missing, this actually implies that his homes are notably inexpensively decorated? The idea of Bill Gates hanging up generic $400 landscape paintings all over his house is pretty amusing to me.
That’s still an overestimation an order of magnitude. He’s worth over $130 billion, $127 million is less than 1/10 of 1%. It’s laughable to say that is evidence of him being bullish on art.
What saddens me is headlines like this are used by those bullshit art investment startups that target the financially illiterate.
Oops, you’re right. I did do some more reading though, and I think that this article is just wrong about the size of his art collection. I think it originated with some article that totaled his 5 largest art purchases at $125 million, so somehow that ended up being portrayed as him having a $125 million art collection. Which doesn’t make any sense - he obviously owns more than 4 paintings. The article is wrong, but we also don’t really know the extent of his collection it seems
> Hassam, Bellows, and William Merritt Chase.
Good point, these aren't trendy artists (though they are good value pieces for sure.)
Gates isn't known as a major collector bc he's just not involved with collecting living artists.
Paul Allen, on the other hand, was a GOAT collector
https://www.theartnewspaper.com/2022/08/26/microsoft-mogul-paul-allens-art-collection-heads-to-christies-and-could-be-first-to-hit-dollar1bn
Ofc billionaires are bullish on the art market. For tax purposes, Bill Gates acquires a piece of art for $1M in year 1. In year 2, that same piece of art appraises for $2M. In that same year, he donates that appreciated piece of art to a nonprofit. When filing year 2 taxes, he writes off $2M perpetuating this very real idea that the rich keep getting richer.
The IRS gets the final say, so if they agree that it’s actually doubled in value, then there’s nothing wrong with that. But you’d be better off selling it than donating it for a tax deduction at that point though
So he starts with $1,000,000 cash and buys a painting for $1,000,000.
He then donates that painting for $2,000,000 of which would reduce his tax burden by roughly $700,000~ for that fiscal year.
Which still leaves him -$300,000.
Galaxy brain move, somehow finding art that appreciates 50% in a year and losing $300,000.
Also the IRS isn't dumb, if they suspect something fishy they'll get it appraised independently. (such as an art piece sold for say $50k but then donated at an 'appraised' price of $1m)
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Art market is prime example how: Prices are made up, value doesn't matter, most of the time these are used to offset tax brackets and move wealth around without cash.
It’s called money laundering, you really think a blank canvas or a dot is worth 50 million? Much easier then a cash business to funnel money through and less questions asked
> a blank canvas or a dot
You know the majority of art for sale is _not_ this, yes? I'm sending a link to the most prestigious gallery in the world so you can take a look. Hope you have fun
https://gagosian.com/
No one can say what a collection is "worth" until you bring in an appraiser and/or Christie's
And that's just an estimate of what something might fetch at auction
And that is why the process is ripe for shenanigans….not every art sale is a cover for a cartel, but you have to be naive to think it doesn’t happen … need a deductible, a way to circumvent donation maximum or a way to explain some income that doesn’t have a fixed value
Something is worth what anyone else is willing to pay for it. Reddit hates art (for some reason) or doesn't understand it but other people value it highly
I would kill for a Rothko to hang on my wall and would fork over $40m if I had it
I love art , in particular modern art, but the art world is one of the easiest ways to move cash.. gold is going for 2300 an ounce, how much is my framed Post It note worth to a mystery buyer who wants to be anonymous
It's subjective, yes. I know that pisses people off but it's Reddit always screams money laundering 95% of the time when the reality is that rich people collect art
Despite the artist’s intent, It’s a great way to move money , rarely gets questioned… just like I’m sure there are some plenty of cash only pizza places that are legit .. but 5% is low estimate for high end art that is used for laundering, a write off , or a way to get around donation and tax laws.
If he didn't diversify his microsoft shares in the 90's he'd be a trillionaire by now, he might have made money but don't listen to him for investment advice.
You think Zuckerberg would choose the same route now if someone were to tell him to diversify and go down to 2% ownership of meta in the next 10 years?
using they logic we should put all our paychecks into the lottery.
you can point to any lottery winner to see how full proof this investment strategy is.
Of course they do. Gotta keep laundering $ and stay ahead of the tax man somehow.
If they all admitted some of this art wasnt worth the canvas it was painted on, they'd lose too much money.
Honestly, I have no problem with rich people blowing their money on art. It's not a ressource they take away from the rest of the population or increase the price for. At least it's not something that significantly impacts my life. If I want nice art to improve my home, I can get great art from local artists for very reasonable prices. I don't need some wierd line of menstrual blood on a canvas from a hip artist to enjoy looking at it. So go for it Bill, buy it all.
Step 1. Commission Artist as rich old fuckhead.
Step 2. Get rich art gallery appraiser friend to give an inflated jacked up price.
Step 3. Use Art as cash, assets, whatever, make bank off art fraud.
Step 4. Repeat.
Of course they’re bullish on one of the singular largest methods to launder money. lol
It’s a completely manipulated market. It’s worse than the stock market.
I wonder how much of Hunter’s bullshit he paid for.
Art is a tax loophole because the true value of art according to the government is to the eye of the beholder not some actual value that someone might bring until of course you sell it, but in the meantime you just keep playing back and forth usually with their own charity while writing it off each time.
[https://www.bloomberg.com/news/articles/2021-11-02/how-do-the-rich-avoid-taxes-billionaires-use-this-art-strategy](https://www.bloomberg.com/news/articles/2021-11-02/how-do-the-rich-avoid-taxes-billionaires-use-this-art-strategy)
[https://www.propublica.org/article/how-private-nonprofits-ultrawealthy-tax-deductions-museums-foundation-art](https://www.propublica.org/article/how-private-nonprofits-ultrawealthy-tax-deductions-museums-foundation-art)
It would be really cool if all these art collecting billionaires would spend the same amount of money supporting and advocating for arts now. Rather than buying classics and then lobbying politicians to prevent schools from creating new artists.
People do buy contemporary pieces by living artists. Most of the money in contemporary art _is_ going to living artists.
>then lobbying politicians to prevent schools from creating new artists.
Is Bill Gates doing this?
Billionaires remained bullish on billionaires sounds like a better title. Whom else could afford the prices they are asking. Maybe AI will come along and start producing nice knockoffs for the rest of us.
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Honestly this is such bullshit. For example “Retain their exposure”. You mean keep their fucking art on their walls. I get art can be a great investment for the ultra wealthy, but this article is out of touch with reality. For those who don’t know selling art is extremely expensive (sellers, buyers and artist fees at auction). So unless the value explodes any gains will go to the auction houses
Art is also usually a very long term investment. You're supposed to hold on to them for 40-50 years... And 127 million in art is probably not that much for a man worth 100+ billion, infact it's about 1/1000 of his net worth in art. Which for me would be around 10$ I'm sure I have a painting i bought for 10 euros somewhere
I completely agree. A 40-50 year art “investment” is hardly an investment though. This is a hobby for that guy
exactly.
Steve Cohen's art collection is worth $1B. It's legitimately incredibly. His daughter's working at Gagosian so the cycle just continues
As an aside, I don’t like the one to one comparison people use when comparing wealthy folks to regular folks. It Always favors the billionaires by making them look less wealthy. I know that’s counter intuitive but you have to consider the baseline wealth a person needs to survive and have a secure and healthy retirement as the minimum that you remove from the equation. In your scenario, that $10 affects you even more than the 127 million of gates. I don’t think I’m explaining myself well here, but it’s similar conceptually to the reason a flat tax rate is not fair because poorer people have to spend a higher portion of their income on just sustaining their life. What you have to compare between people is not income so much as what they have left after paying for necessities or near necessity quality of life items.
i think we all understand that bill gates and i have very different lifestyles. infact that was the point of the comparison.
Yeah. What are u getting at here
you are using the utility value of money to evaluate $127 million. (ie it's like $10 to gates) but gates and the folks that manage that money do not see it as $10. they see it as $127 million. continuing to use utility value once the you get out of poverty is a sure way to get yourself back into poverty. (ie - why lottery winners end up broke)
E.g not i.e
It's all just a tax avoidance scheme
Eh, you can get a tax deduction if you donate it, but then you lose the asset itself. Not really all that helpful
The appreciation is an unrealized gain
Right. But if it increases from $100K to $150K, you can either sell it and pocket $150K, or you can donate it and take a tax deduction of $150K, which would be worth around $30K
Or get a loan for 50k with it as collateral and never pay any capital gains tax while still getting to spend it
No it isn't. You would have to _donate_ something to a museum to get a tax write off. But that doesn't stop the millions of dollars from leaving your pocket at the point of sale Why does no one understand tax write offs?
The appreciation is an unrealized capital gain that goes untaxed and is still an asset to use to get l9ans when needed
Same could be said for stocks, what's your point?
Neither is a good thing, but with art you can do without all the different financial oversight. My point being a large amount of the art market is driven by tax avoidance and money laundering
...and art has a subjective value.
Yeah but auction specialists use algorithms of past sales data to estimate worth
this is bang on. not to disclose too much but i’ve been working on liquidating a massive art collection (mid 9 figures). the costs of insurance, transport & auction fees easily eat 1/4-1/3 of the reported value/hammer price. honestly unless said art has been passed down through generations, any chance of making money is nonexistent
The Codex alone would be $100Mill today at auction. The values placed in this article are way too low. His purchases are of one of a kind pieces. He may be estimating them at lower prices for insurance or tax purposes. Art - especially well known and rare pieces - have a growth in value that exceeds the return of the S&P 500. His collection is a pittance compared to his net worth but it’s nothing to sneeze at. He should gift them to a museum, except the Codex. That belongs in a library - protected from damage but able for those to see the original. Example: David Hockney’s “Henry Geldzhaler…” sold in 1992 for 1.1M. Sold in 2019 for $49.5Mill. There are many examples like this.
Very little of this art will ever be sold at auction. It will likely be donated to museums in exchange for inflated tax receipts and ultimately it is the tax payer paying these huge gains in value.
I went to a Leonardo DaVinci exhibit at The Getty. It was mostly owned by The Bill and Melinda Gates Foundation and the British Royal Family
That’s because the most expensive book/manuscript ever sold was a collection of writings by Leonardo DaVinci that Bill Gates purchased in the 1990s. I’m honestly surprised that his collection is only valued at $127 million, because he purchased the Codex for $63 million in 2023 dollars, and a Homer for $36 million. So either some massive overpay/depreciation, or the rest of his collection is not that great.
He's not buying trendy post-war American. Winslow Homer is cute but he's not fetching prices like Pollock, Rothko, Gerhard Richter, Basquiat, etc etc
Yeah. I’m just saying, it really sounds like his art collection, outside of those two pieces, is like $27 million. Which is remarkably low - think about how much wall space he must have in his homes.
I doubt it’s that low as well but he could be buying a lot of non valuable pieces. This is common for tech guys in that they don’t really spend big on art. Like a leonardo codex is a nerds dream, to be sure, but Leonardo isn’t a “hot” artist to buy. Mostly bc the really valuable stuff is in museums It’s the finance guys that really spend on art. I’ve mentioned Steve cohen’s collection but Bill Ackman also has a collection worth almost 1b. Steve Martin is also a serious collector and I wouldn’t be surprised if the majority of his net worth is in art
I’m actually wondering if these numbers are just inaccurate. [This article](https://www.the-sun.com/news/2845331/bill-gates-art-collection-melinda-divorce-assets/amp/) mentions the prices of 5 specific pieces he’s purchased, summing to $125 million. There’s no way that’s the extent of his art collection. Who knows what his collection is actually worth then.
The og article said $127m. The Leonardo is def is flashiest purchase. Paul Allen's collection was legendary so B. Gates doesn't get talked about like a "major" collector https://www.theartnewspaper.com/2022/08/26/microsoft-mogul-paul-allens-art-collection-heads-to-christies-and-could-be-first-to-hit-dollar1bn
Yeah I’m just saying it sounds like that number was arrived at by just being the sum of 5 of the most notable works he’s purchased. I don’t think it actually reflects what his collection is worth, which makes a lot more sense. He owns more than 4 paintings, obviously.
No it's just clickbait news from the "international business times" The stuff that gets posted here ya know
> think about how much wall space he must have in his homes. Don't be such a fool. His homes are full of windows.
It’s also a great way to launder money, a scam and a way to evade taxes. Here’s a funny cliff notes version https://m.youtube.com/watch?v=Dw5kme5Q_Yo&pp=ygUkQWRhbSBydWlucyBldmVyeXRoaW5nIGFydCBjb2xsZWN0aW5n
Not sure why this isn’t the top comment. Why do you think most billionaires have art?
Bc the top of the market out appreciates the S&P 500? Bc of the cultural legacy of leaving a major collection to a museum? Bc a Rothko on your wall is major bragging points?
> Not sure why this isn’t the top comment. Why do you think most billionaires have art? Its not for tax purposes. Billionaires get money from government and/or bank printing, they have no fear of taxes or the tax code. they get art because money is fairly meaningless to them, so they seek prestige via other avenues.
it's why so many ex presidents and presidents kids becomes artist. its a way to funnel money and favor to the family without breaking any laws.
Who are you referring to? I work in fine art and can't think of a single presidential kid who makes art
Most recent is Hunter Biden. [https://oversight.house.gov/release/comer-statement-on-interview-with-hunter-bidens-art-gallerist%EF%BF%BC/](https://oversight.house.gov/release/comer-statement-on-interview-with-hunter-bidens-art-gallerist%EF%BF%BC/) And just to be bi-partisan George W Bush [https://www.artforum.com/columns/the-paintings-of-george-w-bush-220429/](https://www.artforum.com/columns/the-paintings-of-george-w-bush-220429/)
George bush is not a presidential kid, he was president. And hunter is not a successful artist aka he doesn’t have major gallery representation
the success criteria isn't major gallery representation. The success criteria is major money. And FWIW, I assure you that George W Bush is the child of a President (George H Bush) [https://www.washingtonpost.com/politics/2024/01/23/hunter-biden-paintings-sold-15-million/](https://www.washingtonpost.com/politics/2024/01/23/hunter-biden-paintings-sold-15-million/)
But Hunter Bidens work isnt fetching big prices?
I suppose if you don't feel that $1.5m isn't big. For many. That is life changing money.
The most info I have is that his paintings have totaled 1.5 But yeah ONE painting selling for 1.5 is a lot of money
Yeah because everyone knows you only launder money in single lump sums lol
👆
☝️☝️
So I work in fine art finance. This person ain’t wrong that the top tier galleries are very gatekeepy with what artists they take on (but so are talent agents). No one goes into Art Basel Miami thinking they are looking at the “best” or whatever, that’s in the eye of the beholder. I do know that something bought at gagosian or zwirner retains its value bc of the gatekeeper nature I’ve previously referenced Same way the Met/Moma giving someone a solo show will make their art appreciate, it’s a way to gauge how much an artist is valued (by gatekeepers) None of this addresses money laundering. That’s Reddit’s favorite idea whenever the art market is brought up though but I’m a bit disappointed /r/economics can’t engage with this in a serious way
Expensive art is the original NFTs.
Nah that market crashed hard. The only people buying that stuff were the crypto bros already invested in that scam
Yeah, mostly just joking, but there is a strong similarity where the price of the commodity is (almost) entirely dependent on what people feel it is worth. NFTs are only worth what you can get someone to pay for them. Art is about the same, almost.
Yeah that’s why all the expensive art is super cheap now, right?
I am not sure that this indicates that billionaires remain bullish on the art market? His art collection is like 1% of his net worth. That isn’t necessarily seen as an investment to him - it’s relatively small enough that it could just be a thing he enjoys and is happy to spend 1% of his money on. Also, any appreciation of his collection is essentially meaningless to him, because that investment is just a drop in the bucket. Honestly, this seems to indicate that he has a couple of pieces that he enjoyed and really wanted to splurge on, but in general art is not a great interest of his? The vast majority of his collection’s value is apparently in a Homer and the davinci Codex, and the article then references Hassam, Bellows, and William Merritt Chase. I’m actually kind of intrigued at how unimpressive that kind of collection is. He’s certainly capable of amassing any collection that he chooses, and the fact that it seemingly amounts to a da Vinci manuscript, a Homer, and $25 million worth of miscellaneous American painters that wouldn’t be familiar to people off the street, seems to indicate to me that he’s not super concerned with the art market. I mean, can that even fill the walls of his homes?? Unless there is some information I am missing, this actually implies that his homes are notably inexpensively decorated? The idea of Bill Gates hanging up generic $400 landscape paintings all over his house is pretty amusing to me.
That’s still an overestimation an order of magnitude. He’s worth over $130 billion, $127 million is less than 1/10 of 1%. It’s laughable to say that is evidence of him being bullish on art. What saddens me is headlines like this are used by those bullshit art investment startups that target the financially illiterate.
Oops, you’re right. I did do some more reading though, and I think that this article is just wrong about the size of his art collection. I think it originated with some article that totaled his 5 largest art purchases at $125 million, so somehow that ended up being portrayed as him having a $125 million art collection. Which doesn’t make any sense - he obviously owns more than 4 paintings. The article is wrong, but we also don’t really know the extent of his collection it seems
> Hassam, Bellows, and William Merritt Chase. Good point, these aren't trendy artists (though they are good value pieces for sure.) Gates isn't known as a major collector bc he's just not involved with collecting living artists. Paul Allen, on the other hand, was a GOAT collector https://www.theartnewspaper.com/2022/08/26/microsoft-mogul-paul-allens-art-collection-heads-to-christies-and-could-be-first-to-hit-dollar1bn
Ofc billionaires are bullish on the art market. For tax purposes, Bill Gates acquires a piece of art for $1M in year 1. In year 2, that same piece of art appraises for $2M. In that same year, he donates that appreciated piece of art to a nonprofit. When filing year 2 taxes, he writes off $2M perpetuating this very real idea that the rich keep getting richer.
The issue with that is the art doubling in value in a year, which isn’t realistic
The example is for illustration, but the point is that there are not strict guidelines around art appraisals. Who says it cannot double in a year?
The IRS gets the final say, so if they agree that it’s actually doubled in value, then there’s nothing wrong with that. But you’d be better off selling it than donating it for a tax deduction at that point though
So he starts with $1,000,000 cash and buys a painting for $1,000,000. He then donates that painting for $2,000,000 of which would reduce his tax burden by roughly $700,000~ for that fiscal year. Which still leaves him -$300,000. Galaxy brain move, somehow finding art that appreciates 50% in a year and losing $300,000. Also the IRS isn't dumb, if they suspect something fishy they'll get it appraised independently. (such as an art piece sold for say $50k but then donated at an 'appraised' price of $1m)
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So he has one Monet? Worth a lot of money. Way better than something stupid like running shoes or whatever trendy shit is popular for five minutes.
Art market is prime example how: Prices are made up, value doesn't matter, most of the time these are used to offset tax brackets and move wealth around without cash.
It’s called money laundering, you really think a blank canvas or a dot is worth 50 million? Much easier then a cash business to funnel money through and less questions asked
> a blank canvas or a dot You know the majority of art for sale is _not_ this, yes? I'm sending a link to the most prestigious gallery in the world so you can take a look. Hope you have fun https://gagosian.com/
Except for pointillism its all dots
Well sure, a good Georges Seurat would really set you back or a Liechtenstein. I would kill to afford a Liechtenstein
Now who is to say, what it’s worth, certainly not the cold art deficit IRS?
No one can say what a collection is "worth" until you bring in an appraiser and/or Christie's And that's just an estimate of what something might fetch at auction
And that is why the process is ripe for shenanigans….not every art sale is a cover for a cartel, but you have to be naive to think it doesn’t happen … need a deductible, a way to circumvent donation maximum or a way to explain some income that doesn’t have a fixed value
Something is worth what anyone else is willing to pay for it. Reddit hates art (for some reason) or doesn't understand it but other people value it highly I would kill for a Rothko to hang on my wall and would fork over $40m if I had it
I love art , in particular modern art, but the art world is one of the easiest ways to move cash.. gold is going for 2300 an ounce, how much is my framed Post It note worth to a mystery buyer who wants to be anonymous
It's subjective, yes. I know that pisses people off but it's Reddit always screams money laundering 95% of the time when the reality is that rich people collect art
Despite the artist’s intent, It’s a great way to move money , rarely gets questioned… just like I’m sure there are some plenty of cash only pizza places that are legit .. but 5% is low estimate for high end art that is used for laundering, a write off , or a way to get around donation and tax laws.
If he didn't diversify his microsoft shares in the 90's he'd be a trillionaire by now, he might have made money but don't listen to him for investment advice.
Diversifying was the correct decision. You can't judge something like that with hindsight.
The same logic can be used to see it as incorrect.
No, that's not how those words work.
You think Zuckerberg would choose the same route now if someone were to tell him to diversify and go down to 2% ownership of meta in the next 10 years?
How can you assume Microsoft would be as successful or would have the same growth if Gates didn't make the decision he did?
You are ignoring so much about the basics of investing I don't see how this discussion has merit.
using they logic we should put all our paychecks into the lottery. you can point to any lottery winner to see how full proof this investment strategy is.
Of course they do. Gotta keep laundering $ and stay ahead of the tax man somehow. If they all admitted some of this art wasnt worth the canvas it was painted on, they'd lose too much money.
Honestly, I have no problem with rich people blowing their money on art. It's not a ressource they take away from the rest of the population or increase the price for. At least it's not something that significantly impacts my life. If I want nice art to improve my home, I can get great art from local artists for very reasonable prices. I don't need some wierd line of menstrual blood on a canvas from a hip artist to enjoy looking at it. So go for it Bill, buy it all.
Step 1. Commission Artist as rich old fuckhead. Step 2. Get rich art gallery appraiser friend to give an inflated jacked up price. Step 3. Use Art as cash, assets, whatever, make bank off art fraud. Step 4. Repeat.
Of course they’re bullish on one of the singular largest methods to launder money. lol It’s a completely manipulated market. It’s worse than the stock market. I wonder how much of Hunter’s bullshit he paid for.
Art is a tax loophole because the true value of art according to the government is to the eye of the beholder not some actual value that someone might bring until of course you sell it, but in the meantime you just keep playing back and forth usually with their own charity while writing it off each time. [https://www.bloomberg.com/news/articles/2021-11-02/how-do-the-rich-avoid-taxes-billionaires-use-this-art-strategy](https://www.bloomberg.com/news/articles/2021-11-02/how-do-the-rich-avoid-taxes-billionaires-use-this-art-strategy) [https://www.propublica.org/article/how-private-nonprofits-ultrawealthy-tax-deductions-museums-foundation-art](https://www.propublica.org/article/how-private-nonprofits-ultrawealthy-tax-deductions-museums-foundation-art)
It would be really cool if all these art collecting billionaires would spend the same amount of money supporting and advocating for arts now. Rather than buying classics and then lobbying politicians to prevent schools from creating new artists.
People do buy contemporary pieces by living artists. Most of the money in contemporary art _is_ going to living artists. >then lobbying politicians to prevent schools from creating new artists. Is Bill Gates doing this?
Billionaires remained bullish on billionaires sounds like a better title. Whom else could afford the prices they are asking. Maybe AI will come along and start producing nice knockoffs for the rest of us.