Auction News Network

Does Pebble Beach Point Way For Fall Art Market?

Rarity and provenance proved a winning combination at the recent vintage auto auctions surrounding the Pebble Beach Concours d’Elegance. Nearly $175 million changed hands in a single long weekend– a robust and encouraging result that may point the way to a brisk fall sales season for art.

Dealer Status And The Unique Advantages It Offers Vintage Car Collectors

Recently a 1936 Bugatti Type 57SC Atlantic sold for a reported $40 million. Granted, that’s the world’s most expensive car, and one of only three ever built, but the cost raises an important financial question for car aficionados. Classic car and race car collectors claim the reasons for their expensive purchases are varied but most often include personal pleasure and recreation, increasing asset value and short-term market movement, or business profit. While acquiring beautifully restored antique cars may be your high-octane passion, the IRS could see this hobby as a business, thereby changing your tax status.

In terms of tax issues, the distinction between collectors, investors and dealers is of great importance. A collector is considered someone who buys and sells vehicles for personal pleasure and/or recreation. An investor is seeking profit from appreciation of a vehicle’s value and a dealer’s purpose is to pursue business profit by selling vehicles to his or her customers.

Consider the effects of these tax advantages and disadvantages on your collecting status:

The tax rate on long-term collectible capital gain is 28%, whether you are a collector or an investor. A collector’s capital loss is disallowed and deduction of collecting expenses is limited.

Investors are allowed to deduct capital loss in the current year depending on their capital gains status and they face a tax rule that is generally more favorable than that which collectors face.

But becoming a vehicle dealer may create additional, unique tax advantages.

Because tremendous sales tax is imposed on valuable antique cars and racecars, more tax advantages may result from sales tax savings which a dealer is not required to pay if cars are purchased as inventory with intent to resell. Though your net income is subject to the ordinary income tax rate which is 7% higher than the collectible capital gain rate, your business-related expenses are completely deductible as part of ordinary trade.

When acquiring antique or classic cars, you have choices, each with pros and cons. Although the risk of an IRS Hobby Loss tax challenge is low, you may still need to pay attention, to not raise red flags. The key point is that you should keep adequate records to substantiate your profit, purpose and reasonable regularity and continuity of your trade or business. There are additional exceptions to tax rules for dealers of which a tax advisor can inform you. It is highly recommended you consult with an advisor for tax implications before any critical decisions are made.

John Lennon’s Loo

Last week, admirers of  “Catcher In The Rye” author J.D. Salinger had cause to recoil when the toilet from his Cornish, New Hampshire home appeared on eBay with a “Buy It Now” price of $1 million. This week, fans of John Lennon have their turn. Carrying an estimate of $1500, the former Beatle’s toilet will be sold at the  Liverpool Institute of the Performing Arts.

Hopper’s New York At Swann’s

Edward Hopper and Childe Hassam will headline Swann’s September auction of Prints, Drawings & Paintings of New York, 1900-2000. Top lots are Hopper’s brooding “Night Shadows” 1921, an etching estimated at $30-$50,000, and Hassam’s “Fifth Avenue” 1916, which is expected to sell for $10-$15,000.

High Caliber Results Expected At Arms Sale

Vintage Winchesters, part of the A.I. McCroskie Collection, headline Rock Island Auction’s arms sale next month. An 1876 “One of One Thousand” lever action Winchester is expected to sell for a hefty $300-$500,000. and a 1873 Winchester rifle once featured at the 1876 Philadelphia Centennial Exposition is estimated at $200-$400,000.

“Lost” Items Find Eager Buyers

Stage fog swirled in a studio set forest as bidders eagerly competed this past weekend for props and memorabilia from the popular series “Lost.”  With over 100 people bidding, a script signed by series creators J.J. Abrams and Damon Lindelof sold for $18,000, or 600 times its estimate, And a red and white Camarro featured in Season 3 sold for $24,000, well above its $15,000 estimate.

Pens In The Black At Bonhams

Montblancs ruled at Bonhams’s New York sale of pens today. Top lot at $20,740 was a Montblanc Magical Black Widow Skeleton Limited Edition 88 Fountain Pen.Other standouts included a Montblanc Hommage a John Harrison Skeleton 333 Limited Edition, which fetched $15,860 and a Montblanc 4^th of July Limited Edition 56 Fountain Pen, which realized $14,640.

Ballentine Booty From The “Whisky Galore”

The SS Politican was carrying 28,000 cases of whisky when it ran aground off Scotland’s Hebrides Islands. Local islanders lost no time “liberating” some 24,000 bottles before customs officials  blew up the ship, which had become known as “Whisky Galore.” At its Scottish sale in Edinburgh this week, Bonhams will auction a rare bottle of Ballentine’s  that escaped the blast. It’s expected to sell for $1800-$2400.

Six World Records at Gooding’s Pebble Beach Sale

Although 23% of its lots failed to find buyers, Gooding and Company still managed to achieve $64.59 million in sales at its collector car auction at the Pebble Beach Concours d’Elegance. Two vintage Ferraris each sold for over $6 million, as did a 1933 Alfa Romeo 8C 2300 Monza, as Gooding recorded six new world records.

Multiple Million $ Cars at RM Auction

RM Auctions raked in more than $44 million at its annual Monterey auction that wound up Aug.14, 2010. Out of 172 automobiles offered, 147 found new owners for a 85% sell rate.

Claims About Adams Negatives Grow Murkier

If seemed too good to be true, if may have been for a good reason. Claims regarding the supposed yard sale find of a $200 million trove of Ansel Adams’s negatives grew murkier, as it emerged that the Beverly Hills “expert” authenticating their provenance, estimating their value, and selling the prints is a convicted felon.

Bonhams Scores Porsche Record Price at Pebble Beach

Bonhams called results of its car auction held at Quail Lodge near Monterey a “resounding success.” It is one of five auction houses that annually bring spectacular collectors’ cars to sell during the same week the Pebble Beach Concours d’Elegance is staged. Total sales came to $18.6 million with a 74% sell rate.

Beatles’ Abbey Road Piano

From the 1960s through the 1980s it sat in the legendary Abbey Road Studio, where the Beatles used it to record “Paperback Writer.”  Pink Floyd played it on“Dark Side of the Moon,” This weekend Bonhams will sell the Challen upright piano for an estimated $155-233,000 at its “Pioneers of Popular Culture” sale.

Toys For Sale, Too Many to Describe

Maybe there never was a toy collector like Don Kaufman. He was so crazy about toys he founded the company, K-B Toys.  So large was his collection they’ve already held three auctions and now Bertola Auctions will host a fourth sale September 24&25, 2010. The first three auctions brought in nearly $10 million.

Art Market Revives

Spurred by wealthy Asian buyers, the international art market seems to have recovered from its recessionary plunge. Both Sotheby’s and Christie’s reported sharp increases in revenue during the first half of this year. “We’re not going to lull ourselves into a false sense of security,” said Christie’s Ed Dolman, “ but the art market does seem to be recovering more quickly than anyone here expected.”