From: jeffrey E. <[email protected]> Sent: Friday, September 22, 2017 5:18 PM To: Barry J. Cohen; Melanie Spinella Subject: Re: Art in CLATs--PRIVILEGED AND CONFIDENTIAL there is a reason i have not engaged on this subject:40=AD and have no intention of doing so. =C2* one point. barry, as this is really a waste =f time. the main goal is not to avoid estate tax. =eons goal is to ulimately transfer the most value to the kids. =. silly beyond belief. sorry On Fri, Sep 22, =017 at 12:32 PM, Barry J. Cohen wrote= Conversation with Heather and Alan: • Art is valued on the same=date for the estate as it is for a testamentary CLAT, even if the CLAT is =ot funded for years after death. ` If the 6-month valuation =s lower for the non-CLAT art, we will be obligated to use that valuation f=r everything, including the CLAT. ` Therefore, there is =o chance of the art being valued at a high price for estate tax purposes a=d a lower price for the CLAT. • Accordingly, we don't really care how long =t takes the art advisory board to value the art. • Because the 2-year statut= of limitations cannot be extended, even with taxpayer consent, the IRS mu=t come up with a valuation within 2 years of filing. • We do prefer a lower=valuation for the CLAT so there is a greater likelihood of something going=to the kids. There is a risk that the art could be sold for an amount below the v=luation. Two mitigants: If it is sold below our t=ntative valuation before filing, it is common to change such valuation in =he filing. If it is sold below the art board's valuation, that would be b=d, but always a risk that is run with an estate selling assets.<=u> • Agree that paying ta= on art in fractional interests could be better, but it would lead to payi=g estate tax, whereas the CLAT route pays no tax. • Giving=fractional interests to the CLAT might also be attractive. We are no= sure of LDB's appetite to put more art into the art partnership o= other fracti