Taxes: present and future with art business specialist, CPA Steven Goldglit
PASSING A BUSINESS FROM ONE GENERATION TO THE NEXT IS USUALLY A GRADUAL PROCESS RATHER THAN A SINGULAR EVENT OFTEN COMPLICATED BY FAMILY DYNAMICS OR THE DIFFICULTY OF THE FOUNDER TO PASS ON THE TORCH BUT SUCCESSION PLANNING IS A CRUCIAL COMPONENT FOR ANYONE INTERESTED IN LEAVING A LEGACY.
IN ENTREPRENEUR.COM, SERIAL ENTREPRENEUR MARK TOREN WRITES:
One great benchmark of leadership is to create your legacy and then step away from it to ensure it goes on without you. If you leave and your legacy goes with you, then the vision wasn’t big enough. To create a legacy strong enough that when you step down, the dream carries on, you should be thinking about autonomy and your personal exit strategy at all times to test weaknesses and holes in your big vision.
TODAY’S LRFA BLOG POST EXPLORES THIS QUESTION WITH TAX EXPERT AND CPA STEVEN GOLDGLIT.
GOLDGLIT & COMPANY, WAS ORIGINALLY FOUNDED AS A PARTNERSHIP BETWEEN STEVEN AND HIS FATHER, A BUSINESS IN WHICH SHARED VALUES, MUTUAL RESPECT AND THE SPECIALIZATION OF TAX AND BUSINESS PLANNING FOR THE ART WORLD, CREATED A SUCCESSFUL SYNERGY.
STEVEN, CREATIVE WORK IN GENERAL, THE ROLE OF AN ADVISOR OR DEALER, OR THE IDENTITY OF A GALLERY SEEM SO CLEARLY ASSOCIATED WITH A SINGULAR VISION. DO MANY GALLERIES AND ART-RELATED BUSINESSES HAVE BUYERS? CERTAINLY INVENTORY IS A CONCRETE ENTITY THAT CAN BE EVALUATED BUT HOW IS THE REPUTATION OF THE BUSINESS AND ITS ARTIST AND CLIENT BASE (AND WHETHER THEY REMAIN LOYAL TO A NEW OWNER) DETERMINED?
The sale of a gallery to an unrelated person is a very difficult transaction and you rarely see this put into action. Most change in ownership of a gallery is within a family between generations – Sonnabend, Pace, etc. Sales to outside persons are rare and tend to fail. As there are no contracts between Artists and Galleries and the continued representation of an artist by a gallery is based solely upon relationships, if the artists and collectors have no previous relationship or confidence in the new owner the gallery will fail. As such, 3rd party purchasers are very leery of the industry and galleries tend to have a measurable lifespan without turnover.
ONE OF THE CHARACTERISTICS OF YOUR FIRM IS YOUR AVAILABILITY, YOUR HANDS-ON ATTENTION TO CLIENT CONCERNS AND COMMITMENT TO OUR WELL-BEING. IS THAT A LEGACY THAT YOU INHERITED FROM YOUR FATHER? HOW WOULD YOU CHARACTERIZE THE STRENGTHS AND SPECIALTIES OF OTHER MEMBERS OF THE TEAM?
Yes, my father was very much like me in his approach to the firm and client needs. I like to see myself as extremely loyal to my clients and willing to do almost anything (legal of course) for them. I know they appreciate this about me and trust me with all aspects of their lives. I become friends with many of my clients and we rarely lose a client unless something goes very wrong. Our team at Goldglit & Company LLP takes its clues from me and treats our clients the same as I would. We try to never let a client down and always try to meet their expectations of how we should work for them. We are now 10 people at Goldglit & Company with more clients than ever before so our principles get challenged all the time, but we always remember how we should be treating our clients and working hard for them, and that always rises to the top. We have CPAs and Accountants with tax specialties, estate expertise and general accounting skills. Our staff is picked based upon how they can interact with our clients and by their strengths.
WHAT ARE YOUR PLANS FOR THE FUTURE OF GOLDGLIT AND COMPANY? DO YOU GROWING THE FIRM OR INCLUDING A MORE DIVERSIFIED CLIENT BASE?
I am very happy with the size of the Firm and do not think we will grow any more unless our client base continues to grow. We do work with new clients all the time but try to limit clients to the Arts – Galleries, Artists, and Designers. If a business does not have any ties to any of these fields I am not as aggressive to bring them on as clients. But exceptions always apply! My 2 business partners have been bringing on new clients as well, but they always are tied to the Arts
WHAT DO YOU ANTICIPATE AS THE TAX REFORMS AND CHANGES WE WILL FACE AS INDIVIDUALS, SOLE ENTREPRENEURS AND CORPORATE ENTITITES IN THE YEARS AHEAD?
As mentioned earlier the new Administration has indicated a desire to lower tax rates – Corporate taxes, personal income taxes and capital gains tax. With the failure of the attempted restructuring of Obamacare (Affordable Care Act)it seems that amending the tax code and tax rates will be pushed further down the line for completion. But the Administration and Congress have clearly stated that lowering tax rates is a primary goal, one that will be addressed within the first 6-9 months of the new Administration. I do believe this will be accomplished in some form before the end of 2017, and if they are successful it may mean significant tax cuts for tax year 2017 and into the future, and all taxpayers need to be aware of this and plan accordingly.
NEW YORK CITY IS THE ART DESTINATION IN THE MONTH OF MAY WITH A FULL CALENDAR: THE FRIEZE ART FAIR, THE OPENING OF MAASTRICHT’S TEFAF AT THE PARK AVENUE ARMORY, AUCTION PREVIEWS AND SALES. GALLERIES PLAN IMPORTANT EXHIBITIONS IN ANTICIPATION OF THE MUSEUM CURATORS, COLLECTORS AND DEALERS THAT DESCEND UPON THE CITY.
NO ONE IS MORE RESPECTED OR ADMIRED THAN CHRISTOPHE VAN DE WEGHE, A SEASONED SECONDARY MARKET DEALER AND FOUNDER AND PRINCIPLE OF VAN DE WEGHE FINE ARTS WHOSE EXHIBITION HISTORY IS MUSEUM WORTHY. IT IS WITH GREAT PLEASURE THAT THE LRFA BLOG WELCOME CHRISTOPHE IN OUR NEXT SERIES OF POSTS.
THE LRFA BLOG LOOKS FORWARD TO YOUR COMMENTS AND QUESTIONS!