Valuing Fractional Interests in Art for Estate Tax Purposes

Abstract

It is difficult to value fractional interests in art because there is virtually no market in those interests. Nevertheless, the Tax Court in Estate of Elkins valued the decedent’s fractional interests in multiple artworks, which the decedent and his children highly cherished. First, the court addressed the restricted agreements under section 2703 and then the court determined the value of decedent’s interests in the art.

Keywords: valuation, estate tax, fractional interests, fractional interests in art, LLC, section 2703, restricted agreements, discounts, Elkins

JEL Classification: K11, K34, H2, H10, H20, H22, H23, H24, H29