What a $450 Million Price Tag Tells Us

On November 15, Leonardo da Vinci’s Salvator Mundi sold for $450.3 million ($400 million plus fees). The auction lasted 19 minutes.

Salvator Mundi:

Where are we going? To the message from the price.

Where to Ship

When you are dealing with a $450 million painting, you want to take a close look at regulatory and fiscal policies.

Let’s assume for a moment that you select Italy as a destination for the Salvator Mundi. Yes, it might be easy to get it into the country. But it could be tough getting it out to another buyer or even a museum because the Italians can limit the movement of any painting that is a part of their cultural heritage.

So maybe instead of Italy, the U.K.? That could work unless you wanted to sell the painting. Then, you would have to give the authorities the opportunity to match a price before selling it outside the country.

You can see that Italy and the U.K. are just two examples of the types of regulatory issues you need to know.

Then though, you have taxes to worry about. Hang the da Vinci in your New York apartment and you will pay what could be a $36 million sales tax. Choose California and you run the risk of owing a “use” tax.

At this point, let’s say you decide the best solution is to give it to a museum and enjoy the tax deduction. But to get the full U.S. deduction in one year, your income would need to be approximately $960,000,000.

How to Ship

The next step is the shipping. Here the experts say you will need decoy trucks, multiple shipments and secrecy. Meanwhile, the truck itself needs climate control, state-of-the-art security, and a high tech crate with a vapor barrier.

Our Bottom Line: The Price System

Hearing that the $450 million painting went for $10,000 at an estate sale in 2005, we know its provenance was unknown. We knew because market generated prices convey a message. While a $10,000 painting says, “I have value but need no guards,” a $450 million painting is far more complicated.

So huge a price tag indicates that the Salvator Mundi was the last da Vinci in private hands and that it was (probably) authentic. It also says that the owner needs to consider carefully where to enjoy it, how to ship it. And we have not even mentioned insurance, upkeep…the list is long.

And it all is based on the message from the price.

As did I, you might enjoy this video of the auction. It was tense:

My sources and more: If you need to know how to bring your $450 million painting home, Artnet has the facts. Then, the NY Times described the auction and Christie’s talked about the picture. Please note that the purpose of today’s post was to connect the broader issues to the price. Always, regulations and taxes have loopholes and detours that could change the conclusions that my source, artnet, presented.