Leon Black, a board member at New York’s Museum of Fashionable Artwork (MoMA), used a tax clause to dodge paying capital good points taxes on dear artwork dealings involving disgraced financier Jeffrey Epstein, in response to a current 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 personal fairness mogul’s connections to Epstein.
In February 2021, over 150 of artists and cultural figures signed an open letter, first revealed 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 bought “Determine Moyenne II” (1947), a bronze sculpture by Alberto Giacometti from his huge personal artwork assortment, for $25 million to the Haze Belief, an entity managed by Epstein, in response to paperwork reviewed by the New York Occasions. On the time, Epstein was a registered intercourse offender. The identical day, an organization tied to Black allegedly used the income from the Giacometti sale to accumulate 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 software that enables an investor to postpone paying capital good points taxes on the income they make from a sale in the event that they reinvest the proceeds into the acquisition of one other comparable asset of equal or larger worth, in response to the Inside Income Providers. 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 similar to art work and collectibles not qualify for this tax loophole.
In one other occasion, one in all Black’s artwork corporations reportedly bought Georges Braque’s oil portray “Le Guéridon” to Epstein’s Haze Belief for $5 million. Once more, these income have been equally rolled over to buy one other unnamed Cézanne portray.
Sloane & Firm, a public relations agency contracted by Black, offered the next assertion: “The New York Occasions reporting confirms the Dechert Report’s public findings greater than two years in the past that Mr. Black paid Epstein for reliable monetary advisory companies. The 1031 exchanges used on this 2017 artwork transaction have been utterly 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 up to now “uncovered severe tax points and different issues with trusts and buildings Black executed to keep away from over $1 billion in future reward and property 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 issues about “whether or not such funds have been correctly characterised as earnings or items for tax functions.”
With an enormous artwork assortment reportedly valued at $1 billion, Black has up to now refused to supply Senate investigators with any solutions or proof that might justify the $158 million he paid Epstein for quite a lot 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 personal artwork assortment.
This investigation additionally follows a lawsuit filed in July accusing Black of sexually assaulting and raping a teenage woman in Jeffrey Epstein’s New York townhouse, accusations that the MoMA trustee has denied. That very same month, the New York Times additionally reported that Black struck a $62.5 million settlement cope with the US Virgin Islands as a way to keep away from potential future prices associated to the territory’s investigation into Epstein’s intercourse trafficking ring.