$5.3m Patek Tiffany

[GoingPlaces]

Originally Posted by 77T

It is a two-way write-off if both happen to be US taxpayers because of IRS’ Temporary Suspension of Limits on Certain Charitable Contributions.

In a charity auction as Christie’s structured it, the Patek’s contributor may claim the fair market value as the donation for them is property and not cash (in this case the MSRP). If the property has appreciated in value, however, some adjustments may have to be made.

The winner of the auction may deduct the hammer price (exclusive of Christie’s premium) up to 100% of their AGI for a qualified contribution minus the original fair market value. Complicated but legit. Therefore, there is no duplication of deductible value.

Until recently that was limited to 60% of AGI. Qualified Organizations
You may deduct a charitable contribution made to, or for the use of, any of the following organizations that otherwise are qualified under section 170(c) of the Internal Revenue Code. This is different than 501.c.3.’s:

- A state or United States possession (or political subdivision thereof), or the United States or the District of Columbia, if made exclusively for public purposes;
- A community chest, corporation, trust, fund, or foundation, organized or created in the United States or its possessions, or under the laws of the United States, any state, the District of Columbia or any possession of the United States, and organized and operated exclusively for charitable, religious, educational, scientific, or literary purposes, or for the prevention of cruelty to children or animals;
- A church, synagogue, or other religious organization;
- A war veterans' organization or its post, auxiliary, trust, or foundation organized in the United States or its possessions;
- A nonprofit volunteer fire company;
A civil defense organization created under federal, state, or local law (this includes unreimbursed expenses of civil defense volunteers that are directly connected with and solely attributable to their volunteer services);
- A domestic fraternal society, operating under the lodge system, but only if the contribution is to be used exclusively for charitable purposes;
- A nonprofit cemetery company if the funds are irrevocably dedicated to the perpetual care of the cemetery as a whole and not a particular lot or mausoleum crypt.

So people who have AGI above $5-6 million won’t have a problem. The cost avoidance value after taxes would be around $2.5 million (my SWAG).

But I agree the idea of paying the hammer amount was somewhat excessive.


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Informative as always.

So PP gets the deduction of 52K plus some adjustments?

Winner gets full deduct minus 52K assuming they meet income (which they do)?

Fees are not included in any deduct.

[1William]

Good information.

[cascavel]

Originally Posted by Token74

Your logic is good but in reality it doesn’t work this way. $5m is relative pennies to a billionaire, check out the running costs of a super-yacht or a major sports team or a private jet.

The experience of winning at such an auction would be so much better than being offered the chance to buy at retail.

I don’t really know why people can’t just be happy for them and enjoy the entertainment. There’s a lot of folk out there (the majority of my friends included) that think it’s mental that we spend four figures on a watch, so everything is relative.


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Amen. When you have a crazy amount of money doing crazy things with it is just de rigueur.

[77T]

Deleted

[eanzenberg]

Literally my point. It’s not charity, it’s welfare to the elites who staged this. The joke is the “fair market value” is $50k. That’s tax fraud, plain and simple. The IRS better have paid attention but my guess they are in bed with the elites anyways. So the winner gets to writeoff 99.9% of the price while obtaining the asset they can sell in the future for more $ to be taxed at the future sell price minus $5m, netting a windfall of ~$2.5m from the US taxpayer.

We pay a shitload of taxes a year, in the 7figs per year now, and this just pisses me off.

Originally Posted by 77T

It is a two-way write-off if both happen to be US taxpayers because of IRS’ Temporary Suspension of Limits on Certain Charitable Contributions.

In a charity auction as Christie’s structured it, the Patek’s contributor may claim the fair market value as the donation for them is property and not cash (in this case the MSRP). If the property has appreciated in value, however, some adjustments may have to be made.

The winner of the auction may deduct the hammer price (exclusive of Christie’s premium) up to 100% of their AGI for a qualified contribution minus the original fair market value. Complicated but legit. Therefore, there is no duplication of deductible value.

Until recently that was limited to 60% of AGI. Qualified Organizations
You may deduct a charitable contribution made to, or for the use of, any of the following organizations that otherwise are qualified under section 170(c) of the Internal Revenue Code. This is different than 501.c.3.’s:

- A state or United States possession (or political subdivision thereof), or the United States or the District of Columbia, if made exclusively for public purposes;
- A community chest, corporation, trust, fund, or foundation, organized or created in the United States or its possessions, or under the laws of the United States, any state, the District of Columbia or any possession of the United States, and organized and operated exclusively for charitable, religious, educational, scientific, or literary purposes, or for the prevention of cruelty to children or animals;
- A church, synagogue, or other religious organization;
- A war veterans' organization or its post, auxiliary, trust, or foundation organized in the United States or its possessions;
- A nonprofit volunteer fire company;
A civil defense organization created under federal, state, or local law (this includes unreimbursed expenses of civil defense volunteers that are directly connected with and solely attributable to their volunteer services);
- A domestic fraternal society, operating under the lodge system, but only if the contribution is to be used exclusively for charitable purposes;
- A nonprofit cemetery company if the funds are irrevocably dedicated to the perpetual care of the cemetery as a whole and not a particular lot or mausoleum crypt.

So people who have AGI above $5-6 million won’t have a problem. The cost avoidance value after taxes would be around $2.5 million (my SWAG).

But I agree the idea of paying the hammer amount was somewhat excessive.


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[77T]

Originally Posted by eanzenberg

We pay a shitload of taxes a year, in the 7figs per year now, and this just pisses me off.

By “we”, do you mean your company, or you pay 7 figures in taxes each year?
Wasn’t sure of the meaning.


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[eanzenberg]

Originally Posted by 77T

By “we”, do you mean your company, or you pay 7 figures in taxes each year?
Wasn’t sure of the meaning.


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Does it matter? Probably shouldn’t have even written it, but I’m fired up when elites dodge taxes.

[77T]

Originally Posted by eanzenberg

Does it matter? Probably shouldn’t have even written it, but I’m fired up when elites dodge taxes.

Sure it matters.

If you or your company are paying 7 figures in taxes then the context is from one who books 8 to 9 figures in AGI.

I agree you could have skipped that part but once it’s there, the context matters.

If you paid that level of FIT then you likely know many of the legitimate deductions allowed.

For my part, anyone who paid this much for the Tiffany Blue 5711 has endowed a great amount to the charity for which the auction benefited. They deserve to utilize the legitimate deduction (not including the FMV or BP).

On the other hand if one spouts numbers that misrepresent standing within the community of taxpayers then the representation appears biased and indignant.


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[eanzenberg]

In the US, you will pay 7figs of total taxes once you book roughly $2.5m in a high tax rate state, not 8 or 9figs of income. The buyer is presumably in NY and likely NYC so will likely be of 40%+ total tax rate as an individual. Owning a business allows for a variety of deductions but earning as an individual does not.

The amount endowed to charity is $50k. Is that a lot? I mean sure, for most people, it is a very nice donation. But the watch sold for $5.3m plus fees. And the new owner will deduct said amount from their AGI, and netted an asset of ~$5m.

Originally Posted by 77T

Sure it matters.

If you or your company are paying 7 figures in taxes then the context is from one who books 8 to 9 figures in AGI.

I agree you could have skipped that part but once it’s there, the context matters.

If you paid that level of FIT then you likely know many of the legitimate deductions allowed.

For my part, anyone who paid this much for the Tiffany Blue 5711 has endowed a great amount to the charity for which the auction benefited. They deserve to utilize the legitimate deduction (not including the FMV or BP).

On the other hand if one spouts numbers that misrepresent standing within the community of taxpayers then the representation appears biased and indignant.


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[Harry_S]

Originally Posted by bankermm

Blue Horseshoe loves 'Tiffany Blue Dial'....spread the word; give your friends a 'taste'

I lol’d at this 🤣 well done sir for that reference.

[JR16]

Originally Posted by eanzenberg

Literally my point. It’s not charity, it’s welfare to the elites who staged this. The joke is the “fair market value” is $50k. That’s tax fraud, plain and simple. The IRS better have paid attention but my guess they are in bed with the elites anyways. So the winner gets to writeoff 99.9% of the price while obtaining the asset they can sell in the future for more $ to be taxed at the future sell price minus $5m, netting a windfall of ~$2.5m from the US taxpayer.

We pay a shitload of taxes a year, in the 7figs per year now, and this just pisses me off.

Actually, if the winner got a tax deduction of $5.x mil - $52k and then sells watch for $5mil next month, he/she will have to pay taxes on $5mil-$52k since this is the value of capital gains. So don’t think your math is correct .

I don’t think there is any fraud here - winner just made a huge charitable donation and got a watch out of it - hopefully he/she wears it , displays it, or does whatever he/she decides will give them pleasure from it. It’s . Just. A. Watch.


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[eanzenberg]

I hope that’s the case regarding if they unload it, that they would need to pay the cap gains on it. Of course they can hold it until death and pass it as inheritance. But I’m done commenting on the tax implications.

Originally Posted by JR16

Actually, if the winner got a tax deduction of $5.x mil - $52k and then sells watch for $5mil next month, he/she will have to pay taxes on $5mil-$52k since this is the value of capital gains. So don’t think your math is correct .

I don’t think there is any fraud here - winner just made a huge charitable donation and got a watch out of it - hopefully he/she wears it , displays it, or does whatever he/she decides will give them pleasure from it. It’s . Just. A. Watch.


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[Stranger]

The charity (and tax write-off) component is the least meaningful element of what went just on. It's really a distraction and is working perfectly.

What we just saw is part of a massive campaign by LVMH to re glamorize the Tiffany brand, which they just acquired and which has very much a faded image right now. After this gloriously successful (from LVMH's standpoint) first step, I expect LVMH to hand-pick the next 169 buyers mostly for maximum coolness and the just-so exposure they seek.

[ericisback]

Originally Posted by brandrea

I was watching, and that indeed is the definition of insanity.

What is everyone watching?

[cascavel]

Originally Posted by JDelage

The charity (and tax write-off) component is the least meaningful element of what went just on. It's really a distraction and is working perfectly.

What we just saw is part of a massive campaign by LVMH to re glamorize the Tiffany brand, which they just acquired and which has very much a faded image right now. After this gloriously successful (from LVMH's standpoint) first step, I expect LVMH to hand-pick the next 169 buyers mostly for maximum coolness and the just-so exposure they seek.

Thank you for filtering out the noise and distilling this down to the marketing play that it really is. Most likely the buyer and the underbidder are financially connected to LVMH and Tiffany or Patek. The amount of press they are getting for this would cost much more than the paltry $6.5 million (tax deductible) that was spent.
The average, very wealthy, Jane or Joe will never see one of these 5711s. They will all end up in the vaults of the Kardashians, JZs, Beyonces, Anistons etc. probably with the understanding that it must be worn in public once.
When Tiffany bestows these 5711s on the chosen they are, essentially, giving out a gift of over $1 Million. Having bought a 5960G and your fiancees engagement ring at Tiffany ain't gonna get you over the finish line.

[Cru Jones]

Originally Posted by JDelage

The charity (and tax write-off) component is the least meaningful element of what went just on. It's really a distraction and is working perfectly.

What we just saw is part of a massive campaign by LVMH to re glamorize the Tiffany brand, which they just acquired and which has very much a faded image right now. After this gloriously successful (from LVMH's standpoint) first step, I expect LVMH to hand-pick the next 169 buyers mostly for maximum coolness and the just-so exposure they seek.

Yes.

Looking beyond watches, one sees LVMH's strategy for bringing some much-needed glamor/notoriety/relevance to Tiffany with the recent Jay-Z & Beyoncé commercial.

[erics]

For me, this is modern times peak Marketing.

The genius of these brands to glamourize a somewhat mainstream object to the point of insanity.

Sell some watch worth $20k (probably already inflated) for $5mln+. Absolutely brilliant.

The length of this thread just demonstrates how big a noise it makes with the target audience.

The cost of a new advertising campaign for PP or T would prob be at least 10x that amount with much less impact.

Genius, absolute Genius.

[AK797]

Originally Posted by Harry_S

I lol’d at this 🤣 well done sir for that reference.

I've used that WS ref a couple of times before, but now one could use it every other week.

[brkn]

Originally Posted by cascavel

Thank you for filtering out the noise and distilling this down to the marketing play that it really is. Most likely the buyer and the underbidder are financially connected to LVMH and Tiffany or Patek. The amount of press they are getting for this would cost much more than the paltry $6.5 million (tax deductible) that was spent.
The average, very wealthy, Jane or Joe will never see one of these 5711s. They will all end up in the vaults of the Kardashians, JZs, Beyonces, Anistons etc. probably with the understanding that it must be worn in public once.
When Tiffany bestows these 5711s on the chosen they are, essentially, giving out a gift of over $1 Million. Having bought a 5960G and your fiancees engagement ring at Tiffany ain't gonna get you over the finish line.

lol, this is tinfoil hat level stuff

the underbidder was a dude named zach from Geneva. there's no way he's connected in any way to LVMH.

[Calatrava r]

This is a Patek entry level SS watch with a simplistic movement and push pins in the bracelet. And what is there, another 149 of them supposedly all of which will be sold to retail customers for 52K, the MSRP. For 5 million one could buy several top-of-the-line Patek super grand complications with money to spare. The current watch market is not about high horology to many with unlimited funds. I agree the purchaser could take a serious hit on this purchase.

[azs.77]

Peak marketing.


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[PPOnlyT-Stamps]

Originally Posted by brkn

lol, this is tinfoil hat level stuff

the underbidder was a dude named zach from Geneva. there's no way he's connected in any way to LVMH.

I believe Zach is from HK. He is an active collector and posts regularly on IG. Recently even has a post on the new Patek 6002R