The Internal Revenue Service has collected a total of $8.5 million in taxes from the estate of Jean-Michel Basquiat following the death of his mother. Since then, the late artist’s father and sisters began taking legal action against the IRS, suing them for their alleged error in overvaluing the prices of Basquiat’s art by $66 million.
There has been legal trouble surrounding the estate for some time, ever since the passing of Gerard Basquiat’s estranged wife Matilda who had an equal share in all revenue collected from sale of their son’s work. Unfortunately, she passed away without a will, prompting IRS to begin collecting fees from the estate while disregarding a “blockage discount” that was placed on the works. A blockage discount is a legal concept in which an estate seeks to forgo the sale of its artwork all at once, an action that could flood the market and significantly depreciate the value of each individual work. An estate’s taxes can be accurately calculated after placing this discount.
The artist’s father defends that the art collection containing 1,351 paintings and drawings by Jean-Michel Basquiat, as well as some thirty-six works by other well known artists, is worth about $127 million. According to the lawsuit, after the blockage discount of $58.4 million is applied, the entire estate’s value is only $72 million.
Since filing the lawsuit in May, Gerald Basquiat passed away in July, leaving his daughters Lisane and Jeanine in charge of the estate as well as the ongoing legal battle to prevent the bulk sale of Jean-Michel Basquiat’s work (Image: Huffington Post)