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Why don't the heirs just donate it and take the charitable deduction to offset the tax? Because given their income and the limits on deductions, they would only be able to deduct a small part of it each year, still leaving them with a huge tax bill.

Could they do something like this:

1.) Get a really good tax lawyer.
2.) Set up a corporation to own the work as its only asset.
3.) Donate the work to the corporation. The corporation issues 100 shares to the donor. So the owner retains the value of the donation. The owners do not get a tax deduction for this because they got the stock in return.
4.) Each shareholder donates a share or two to the museum each year...

Setting up the corporation doesn't avoid the estate tax (assuming the IRS prevails in its valuation of the work). Donating shares of the corporation over time may generate a larger donation (over time) than the amount of the full value that can be claimed over 5 years (the maximum carry-forward for excess charitable contributions), but still leaves a large immediate estate tax liability.

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