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March 13, 2009

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From what I've read, the cause of her financial issues is not spending beyond her means, rather it stems from receiving an inheritance upon her partner's death.

http://www.afterellen.com/blog/juliamiranda/annie-leibovitz-is-in-a-jam

I feel for her. If she were legally able to be married, this would not be an issue. I guess this right is something most of us take for granted.

See also: http://www.afterellen.com/blog/juliamiranda/annie-leibovitz-is-in-a-jam

http://jezebel.com/5164892/is-annie-leibovitz-being-forced-to-pay-a-gay-tax

http://www.fiscalfitnessfortherestofus.net/blog/2009/03/write-about-the-rights/

We have no reason to assume this is a result of financial irresponsibility on the part of Annie Leibowitz, and ample evidence that it is related to the inability of same-sex couples to legally marry, and thus their inability to completely avoid the 50% inheritence tax that married couples do not have to worry about.

WIth all due respect, this is an example of your impulse to judge getting in the way of the facts.

I would love to read a post from Free Money Finance regarding tax and other financial issues for gays and lesbians in domestic partnerships, marriages (Massachusetts), and civil unions.

Death tax gets another...and its only going higher....

also, her partner was very ill before she died (cancer), and I would imagine that the health expenses must have been astronomical, and as both of them were self-employed, they probably must have had to pay a lot, and that would reduce their overall assets.

By what moral principle is a government entitled to a large percentage of someone's legally acquired assets upon their death?

I've always thought we should get rid of the estate tax, but we should also keep existing taxes bases in place. In other words, death should not be a taxable event. If you inherit stock, you inherit the basis at which it was bought for cap gains purposes.

With the estate tax, the stock resets to the market price on the day the person died.

This would get rid of both estate tax awfulness such as the above, but would also get rid of a lot of "infinite depreciation" tricks that wealthy families use to avoid taxes.

Are inheritances from domestic partners (straight or gay) treated differently than those coming from parents, grandparents, platonic friends, etc....?

Suze Orman is always advocating the use of a trust to avoid probate. I can't recall if that also helps avoid the death tax... and I'm assuming she and her partner will eventually face a similar situation as Annie and her partner.

I imagine that depends on the state Melissa. There's no common law marriage in NYC, so as I understand it even if Liebovitz were with a man all those years she would pay the taxes. I read the Salon story on the subject when it was posted. Saddening and maddening, but hopefully all the press this case is getting will make some people appreciate the need for change. I know it makes me happy gay couples can marry up here in Canada.

"Suze Orman is always advocating the use of a trust to avoid probate. I can't recall if that also helps avoid the death tax..."
It doesn't. At least based on what I heard. A very sad story. Also shows that we need to know the details before we jump to conclusions.

Come on now people. Go take a look again at the original article. She has debts related to vendors. Secondly, she has debts related to a lengthy renovation of three townhomes. How is this related to the "tragedy" of the inheritance. Further, if you have a tax bill by inheriting several properties, why not just sell some off.

Also, collateralizing your income stream from artistic works is a relatively well-known trick. David Bowie did it back in the day, for instance. If your income is irregular (as it often is in those circumstances) or you have an unusual need, it can work well. Of course it requires careful running of the numbers, but I imagine she has good people.

JimL: she still had to face a big tax bill that your wife will not when you die. I can't believe you can't see the injustice there. I also can't believe that you can't see how this is "related" to her tax problems. Maybe if she hadn't been socked with what sounds like a multimillion-dollar tax bill, she wouldn't have fallen behind. You think? Maybe?

Sarah,

Tax liabilities are not a hidden problem. We all know the tax laws. She inherited several properties. If you have a tax liability and can't pay for it, you can sell it. I, for one, do not think that death is a reason to tax someone. However, that is the law. If there is concern on leaving a tax liability, then insurance is a tool that is commonly used to offset the tax obligation.


Next, read the article again. She asked vendors to do something and then has not paid the vendors. It had nothing to do with a tax liability. Don't hire vendors if you can't pay the bill. Further, she took on the obligation of extensive renovations to "several" townhomes. I am sorry, but I have a hard time feeling all that sorry when seeing that side of the story as well. She hardly seems to be falling into a hard luck category.

Jim,

You can't be serious. Let me break it down into very simple terms.

I have $100. I owe vendors $75. I can pay it. Great!

I have $100. I incur tax liability on my partner's death of $50. I owe vendors $75. Oops!

Seriously, do you not grasp that if you have more money you can pay more bills?

As for the renovations, you can't tell from the article either way, but high-end properties in the city usually get renovated before sale.

Sarah,

You need to read deeper. Notice the other link in which she hired 6 on-site sytlist appointments and also rented equipment, but failed to pay. Here is the link:

http://gawker.com/5111535/annie-leibovitz-looking-like-a-deadbeat


What are they supposed to do? I am sure they have families to feed, yet you immediately jump to the rescue of Annie Lebovitz.

IF there was debt related to Susan Sontag's death and subsequent inheritance, there has been plenty of time to liquidate some property as the death was way back in 2004. Also, if you don't have money for renovations, then don't do it. What are the contractors supposed to do, work for free? Even if the renovations are to fix up properties (as you are guessing), she has easily had the time to liquidate.

This woman makes $2 million a year and has multiple properties. Forgive me if I don't cry a river, but she clearly has had plenty of resources and an advantaged position to deal with financials.

Fogive me if I do not feel sorry for her. Instead, I feel sorry for the people that provided services/goods and have not been paid.

By the way, Sarah, she wasn't doing some repairs to help resell a property, she was combining 3 townhomes to create a large 10,000 sq. ft. residence in one of the most expensive areas of the country. During her massive project, the adjacent property was also damaged.

Read this:

http://www.thevillager.com/villager_8/neighborswillsell.html

This is not a simple fixer up project to sell off some inherited property. Instead, she is creating a massive home, in one of the most expensive areas of the country. To which, probably 99% of American's could never afford to do. She obviously has an overextended project and had to go into debt to finance this. At the same time, she had hired on some vendors related to her work and has not paid them, yet she still pulls down at least $2 million a year income.

Now, let me ask you again, who do you feel sorry for? What is the cause of her debt? Do you think it was within her power to avoid such financial problems?

I agree 100% ;) Being rich doesn't mean you spend a lot. You still have to spend less than you actually make.

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