INTRODUCTION
A recent Tax Court Memorandum decision,1 involves the
valuation of two Old Masters paintings for estate tax purposes. An
expert at a famous auction house was retained by the estate. His
reasoned opinion as to the value was dismissed by the court when
one of the works was actually sold by the estate several years
later for more than four times the amount determined in the expert
valuation report. While subsequent events generally are not
considered in determining valuation at a specific date, they can be
relevant and were indeed relevant here. In sum, the case provides
an example of what not to do when a decedent owns valuable art.
FACTS
In Kollsman, the decedent was a U.S. citizen who owned
two 17th-century paintings at the conclusion of life. The paintings
needed to be valued for estate tax purposes, and Sotheby's was
retained to perform the valuation. Sotheby's also held
exclusive rights to sell the paintings for the estate. The fee for
the
