A Family s Billions, Artfully Sheltered

Transcription

1 LXI.. No. 55,602 VOL The CLXI New York.. Times No. 55,602 NEW YORK, 2011 The SUNDAY, New York Times NOVEMBER NEW27, YORK, 2011 SUNDA 2011 The New York Times NEW YORK, SUNDAY, NOVEMBER 27, 2011 Lte Edition$6 beyond gre OL. CLXI.. No. 55, The New York Times NEW YORK, SUNDAY, NOVEMBER 27, 2011 CLXI.. No. 55, The New York Times NEW YORK, SUNDAY, NOVEMBER 27, 2011 Tody, periodic clouds nd s quite mild, high 63. Tonight, p to mostly cloudy, mild, low 52. morrow, cloudy, still mild, high Detils, SportsSundy, Pge VOL. CLXI.. No. 55, The New York Times NEW YORK, SUNDAY, NEWS ANALYSIS NOVEM Po Post-Uprisin A A New Bt $6 beyond greter New York metropolitn re. $5. A Arb World Strug To To Shpe New Or By ANTHONY SHADID C CAIRO Through electi prot protests, government form nd nd rmed struggle, Arb tries c tries in n rc from Liby gulf to gulf were engged this pst mor more thn ever in ttempts sim simply overthrow leders, deci b decisively shpe orders follo follow. T The center of tht strugg g gin in Ciro, in lndm Th Thrir Squre, where mov pro movement ws revived ens nd ens were killed in violence. hil hiled it s new revolution opening of front in one one. But it might be better term termed end of begin s w s within spn of just even events breking out here cro n cross region seemed inl BEBETO MATTHEWS/ASSOCIATED PRESS In 2006, Ronld S. Luder, who is now worth $3.1 billion, pid $135 inl million s ny for since Klimt tht burst timi 06, Ronld S. Luder, who is now worth $3.1 billion, pid $135 million for BEBETO MATTHEWS/ASSOCIATED Klimt pinting PRESS Adele Bloch-Buer I. pin BEBETO MATTHEWS/ASSOCIATED PRESS timism when revolts 11 eru m r, who In 2006, is now Ronld worth S. $3.1 Luder, billion, who pid is $135 now worth million $3.1 for billion, Klimt pid pinting $135 million Adele for Bloch-Buer Klimt pinting I. Adele 11 months Bloch-Buer go. I. I In Jnury, it ws n g up A Fmily s Billions, BEBETO M A Fmily s Artfully Billions, Sheltered Artfully ginst dicttorship, She it n is mily s Billions, In 2006, Ronld Artfully S. Luder, who is Sheltered now worth $3.1 billion, pid $135 million for it is Klimt n uprising pinting ginst Adele left wh A Fmily s Billions, Artfully Sheltered left of tht dicttorship, Ste s Steh Noureddine, colum Estée Luder Heir s Tx Strtegies Estée Luder Typify Heir s Advntges Tx Strtegies for Typify Welthy leftist Advntges Lebnese newsp Al fo S r Heir s Tx Strtegies Typify Advntges for Welthy Al Sfir. The fll of regime not Estée Luder Heir s Tx Strtegies Typify Advntges for Welthy By DAVID KOCIENIEWSKI By DAVID KOCIENIEWSKI stock del so udcious tht not Congress revolution, lter tht NOBODY encted Congress PAYS lw lt- THAT forbidding to estblish tctic, Mr. foundtions stock but just to e de BUT NOBODY PAYS THAT WSKI he stood in opulent mrble foyer As he stood in opulent stock mrble del so foyer udcious BUT er encte By DAVID KOCIENIEWSKI ifth Estée of Fifth Luder Avenue mnsion By Heir s lte DAVID KOCIENIEWSKI Tx lst month, Strtegies Typify Advntges for Luder Wh mrble Avenue foyer mnsion BUT lte NOBODY lst month, PAYS THAT Fighting for Tx Breks er encted lw forbidding Fighting Luder for hs stock Tx tctic, for del Breks Mr. decdes so udcious ggressively Arb tht Spring. Congress tken ggressively dvntge of tk- tx breks democrcy tht re useful need time. N Freedom lter encted lw forbidding tctic, Mr. dem BUT NOBODY PAYS THAT ing greeting coterie of prominent guests en dvn te lst month, coterie of Fighting prominent for Tx guests Luder hs for decdes As he stood in opulent mrble Breks foyer ing As he stood in By DAVID rriving opulent KOCIENIEWSKI t mrble his privte foyer rt gllery, of Ronld only for th inent t his guests privte rt gllery, Ronld en dvntge of tx breks only tht for re most useful ffluent. No one expected Arb volt of Fifth Avenue mnsion lte lst month, Fighting for Tx Breks Luder hs for decdes ggressively tken dvntge over wher of tx breks to reduce tht tx re useful shrewd use of United Sttes tx code. shrewd use of United sures Sttes of tx stock personl code. del so udciou S. Luder ws doing more thn just Fifth Avenue As he stood mnsion in opulent lte lst mrble month, BUT being The de llery, Ronld only for most NOBODY ffluent. volts be simple mrch but uder greeting ws doing more coterie thn of just prominent being guests The debte shrewd use of United By PAYS THAT foyer By donting his rt to collection his privte er foundtion, encted vlued lw forbi grcious Sttes donting host. tx his code. rt to his privte foundtion, but rrely hve things shelters seem muc cious rriving n just host. t his privte rt gllery, Ronld being The debte over wher shelters only to reduce nd for preferences most ffluent. tx for rich is greeting By donting of Fifth his coterie rt Avenue to his of mnsion privte Mr. shrewd Luder use prominent lte foundtion, Mr. Luder hs hs of qulified United Sttes lst guests month, Fighting for deductions By tx for Tx code. Breks Mr. Luder hs Luder hs for decd To celebrte 10th nniversry of qulified more much for thn flux, de-witductions shelters nd preferences $1 one more for of pot f celebrte S. Luder ws 10th doing nniversry more thn of just being one rriving t his greeting privte coterie rt gllery, of prominent Ronld guests for of worth most The debte rich voltile over tens is in Wshington wher to nd reduce tx qulified worth donting for deductions worth tens in tens of his millions rt to his of privte dollrs foundtion, of millions for frgmenttion, of dollrs dvntge of tx br Neue Glerie, Mr. Luder s S. museum of billion, including will bloodshe dis move versry Glerie, grcious of Mr. host. Luder s museum of one of most voltile will rriving t his privte rt gllery, Ronld in federl in Wshington move shelters nd income ndpresidentil preferences cmpign, for rich is millions federl of income Mr. dollrs txes over hs qulified yers, for deductions txes over disrry. only yers, While for mny most fflu Luder ws doing S. Luder more Austrin ws thn doing more just nd being Germn thn just being grcious host. grcious host. Klimt portrit millions in will rt, exhibited shrewd works use by Vn of Gogh, United Céznne Sttes tx code. now nly desc tht s in museum nd To celebrte Germn of rt, 10th he nniversry exhibited of will move to presidentil now tht one svings tht cmpign, repeted of most ttempts voltile in Congress Wshington nd in federl income txes svings over tht yers, help worth defry tens of hundreds millions of of dollrs help defry nd describe Mtisse, hundreds The of debte nd disturbnces over inev wh mny of tresures of personl By donting collection vlued t more thn $1 billion, tion, Mr. in- Luder hs qulified for de- nd n o his rt to his privte found- strike g he of Neue exhibited tresures Glerie, Mr. of Luder s personl museum coln of now tht repeted ttempts strike he Congress grnd move brgin to hs bought spent to over presidentil spending cuts cmpign, svings tht help defry millions in hundreds he federl hs spent income of creting txes one over of New yers, creting five yers inevitble one shelters of go New reckoning for nd preferen with cy th personl vlued Austrin t col- more nd Germn thn $1 billion, rt, inncluding works by Vn Gogh, Céznne ductions nd worth tens of millions of dollrs filed. exhibited strike grnd brgin York over nd City s spending n now overhul tht repeted culturl cutsof ttempts tx code hve Congress to gems. To millions celebrte he To hs celebrte spent 10th creting York City s svings 10th one culturl tht nniversry of New gems. help defry hundreds of of of cy of $135 million. one dicttorship, of most ors voltilw $1 works mny of billion, by in- Vn tresures Gogh, Céznne of personl nd collection nd overhul of filed. strike grnd brgin over spending cuts Neue Glerie, Neue Mr. Luder s Glerie, Mr. museum Luder s of museum Austrin of The tx chritble code hve York City s culturl gems. The chritble millions he deductions hs spent generted creting one by of New deductions generted region will move my by fce to yers rest preo, se, Céznne nd vlued nd Klimt portrit t more he thn bought $1 billion, Mtisse, including nd Klimt portrit filed. he in bought federl Yet for income Mr. Mr. A Luder txes hndful Luder, over of n billionires overhul of whose n dontions heir yers, to like hve Wrren tx code Estée E. hve A hnd The chritble Austrin deductions Mr. Luder York nd Germn generted City s whose culturl rt, he by dontions gems. hve ided cuses The rest before exhibited now tht ided help Buffett systems repeted emerge plc tte it ers he go bought for works nd $135 Germn million. by Vn Gogh, Céznne rt, he exhibited five nd yers mny go for of $135 million. tre- A hndful svings mny of tresures of personl collection s vried vlued s Luder of billionires tht fortune cuses defry whose like nd filed. s Wrren Bill vried net hundreds Gtes worth E. hve s hospitls is of joined Democrts spent to rebuild joined creting clling Demo- Jewish one for of n estimted strike nd efforts hve grnd t Buffett n Mr. Luder whose dontions hve s vried chritble ided cuses s hospitls deductions nd generted efforts by plce stgnnt, Americ bck brgin n. for Mtisse, Mr. Luder, nd n Klimt heir to portrit Estée bought Yet for Mr. Luder, n heir Buffett to millions nd Estée Bill he Gtes hs identity New elimintion of in crts in c t hospitls to rebuild Mr. Luder more thn nd Jewish whose $1 efforts to cluding rebuild Jewish identity dontions in Esternhve ided A hndful of billionires like Wrren E. bcked billion, in- nd Estern order n tht overhul held sw of er five r to fortune yers Estée whose go for net $135 worth million. is estid worth t Yet more for Mr. Luder fortune whose net crts worth in York clling is estimted more thn $3.1 breks, billion, sying The chritble tht ticted deductions current tx strtegy system generted used to by preserve for- dds to t City s for culturl Europe breks, Buffett elimintion gems. sying nd re just of tht Bill Gtes current hve system joined Democrts budget in clling deficit, for contributes n elimintion to of one fcet of breks, s Europe works by identity Vn Gogh, in Estern re cuses just s one vried fcet s of hospitls sophisticted nd efforts Céznne nd filed. Continued sophis- on Pge 12 is esti-thn Luder, Europe $3.1 n billion, heir to re just Estée dds to one fcet of tx strtegy to rebuild sophisused Jewish to preserve identity for- in Estern breks, sying tht current system A Fmily s Billions, Artfully Sheltered

2 THE COLLECTOR THE COLLECTOR To celebrte 10th nniversry of his Neue Glerie, R Ronld Luder exhibited works from his personl collection, including Céznnes. BILL CUNNINGHAM/THE NEW YORK TIMES more thn $3.1 billion, evening went beyond socil nd culturl significnce. As is often cse with his ctivities, just beneth surfce ws shrewd use of United Sttes tx code. By donting his rt to his privte foundtion, Mr. Luder hs qulified for deductions worth tens of millions of dollrs in federl income txes over yers, svings tht help defry hundreds of millions he hs spent creting one of New York City s culturl gems. The chritble deductions generted by Mr. Luder whose dontions hve ided cuses s vried s hospitls nd efforts to rebuild Jewish identity in Estern Europe re just one fcet of sophisticted tx strtegy used to preserve fortune tht Forbes mgzine sys mkes him world s 362nd welthiest person. From offshore hvens to tx-sheltering stock del so udcious tht Congress lter encted lw forbidding tctic, Mr. Luder hs for decdes ggressively tken dvntge of tx breks tht re useful only for most ffluent. The debte over wher to reduce tx shelters nd preferences for rich is one of most voltile in Wshington nd will move to presidentil cmpign, now tht repeted ttempts in Congress to strike grnd brgin over spending cuts nd n overhul of tx code hve filed. A hndful of billionires like Wrren E. Buffett nd Bill Gtes hve joined Democrts in clling for n elimintion of breks, sying tht current system dds to budget deficit, contributes to widening income gp between richest nd rest of society, nd shifts tx burden onto smll businesses nd middle clss. Republicns hve resisted, sying tx increses on welthy would hrm economy nd cost jobs. An exmintion of public documents involving Mr. Luder s compnies, investments nd chrities offers glimpse of wide rry of legl options for world s welthiest citizens to void txes both t home nd brod. His vst holdings which include hundreds of millions in stock, one of world s lrgest privte collections of medievl rmor, homes in Wshington, D.C., nd on Prk Avenue s well s ocenfront mnsions in Plm Bech nd Hmptons re orgnized in lbyrinth of trusts, limited libility corportions nd holding compnies, some of which his lwyers cknowledge re intended for tx purposes. The cble television network he built in Centrl Europe,

3 CME Enterprises, mintins n officil hedqurters in tx hven of Bermud, where it does not operte ny sttions. And erlier this yer, Mr. Luder used his stke in fmily business, Estée Luder Compnies, to crete tx shelter to void s much s $10 million in federl income tx for yers. In June, regultory filings show, Mr. Luder entered into sophisticted contrct to sell $72 million of stock to n investment bnk in 2014 t price of bout 75 percent of its current vlue in exchnge for csh now. The trnsction, known s vrible prepid forwrd, minimizes potentil losses for shreholders nd gives m ccess to csh. But becuse I.R.S. does not clssify this s sle, it llows investors like Mr. Luder to defer pying txes for yers. It ws common tx reduction strtegy for chief executives nd welthy shreholders decde go, but in 2006 I.R.S. sid it ppered to be n busive tx shelter nd issued tighter restrictions to regulte prctice. Tht ruling ws enough to persude most welthy txpyers to bndon technique, ccording to tx lwyers nd records t Securities nd Exchnge Commission. Advisers to Mr. Luder mintin tht his del ws mde in complince with published I.R.S. guidnce on se types of trnsctions nd ws fully reported s required by S.E.C. rules, sid his spokesmn, Gry Lewi. In ory, Mr. Luder is scheduled to py txes on $72 million when shres re ctully delivered in But tx experts sy welthy txpyers cn use or ccounting techniques to furr defer ir pyment. The tx burden on ntion s superelite hs stedily declined in recent decdes, ccording to sliver of dt relesed nnully by I.R.S. The effective federl income tx rte for 400 welthiest txpyers, representing top percent, fell from bout 30 percent in 1995 to 18 percent in 2008, most recent dt vilble. When Mr. Luder rn unsuccessfully for Republicn nomintion for myor of New York nd relesed his tx return to public, he reported pying 30 percent in totl federl, stte nd city txes on bout $30 million in income in At time, his net worth ws estimted t nerly qurter of billion dollrs. Billionire s Plybook for Tx Avoidnce To reduce his txes, Ronld S. Luder hs used mny of techniques vilble to welthy to shelter his income while still hving ccess to his money. OFFSHORE CORPORATIONS The brodcst compny Mr. Luder founded, CME Enterprises, opertes television sttions in Europe but hs hedqurters in tx-friendly Bermud. NONPROFIT OR CHARITABLE FOUNDATION Mr. Estée Luder hs donted Lude extensively from n rt collection worth more thn $1 billion to his privte foundtion, entitling him to tx deductions worth tens of millions of dollrs. r Heir s Fortun Mr. Luder hs used hundreds of millions BORROWING AGAINST STOCK of dollrs worth of Estée Luder stock s collterl for low-interest lons. Tht gives him ccess to money without hving to py cpitl gins txes by selling stock. ne, Worth Billi By creting trusts nd putting fmily FAMILY TRUSTS holdings, such s stock nd rel estte, in those trusts, Mr. Luder nd or members of his fmily hve minimized estte txes. ions, Is Artful These re greements to sell stock t VARIABLE PREPAID FORWARD CONTRACT future dte for less thn its current vlue, in return for n immedite csh pyment. These dels postpone cpitl gins txes for Mr. Luder. lly Sheltered Mr. Luder s more recent tx returns remin privte, nd he declined to mke m vilble for this rticle. The Fmily Fortune Mr. Luder, now 67, ws born into storied Americn fortune. His mor, Estée Luder, dughter of Estern Europen immigrnts, begn selling homemde beuty crems t few New York City hir slons in 1940s nd built her product line into multibillion-dollr globl empire. As son of fbulously welthy fshion icon, Mr. Luder developed ristocrtic tstes nd grnd spirtions t n erly ge. He summered in Vienn s boy, developing pssion for Austrin rt nd medievl rmor. At ge 13, he bought his first Schiele with money

4 from his br mitzvh. Mr. Luder grew so enthrlled by politics s young mn tht he told friends he dremed of becoming first Jewish president of United Sttes. After studying in Brussels nd Pris nd t Whrton School t University of Pennsylvni, he joined fmily business in 1964 nd served in vriety of limited roles. While his older bror Leonrd rose to become Estée Luder s chief executive, Ronld engged in vriety of pursuits: becoming mjor Republicn fund-riser; serving rocky tenure s mbssdor to Austri; running for myor, n unsuccessful bid in which he spent $363 for ech vote he received; nd strting n ssortment of business ventures in Estern Europe, one of which went bnkrupt during technology bubble. While fmily s welth ws creted by hrd work nd ingenuity, it ws bolstered by ggressive tx plnning, skill tht hs become Ronld Luder s specilty. When Mr. Luder s fr, Joseph, died in 1983, fmily members fought I.R.S. for more thn decde to reduce ir estte tx. The dispute involved block of shres bequed to fmily estte vlued it t $29 million, while I.R.S. plced it t $89.5 million. A pnel of judges ultimtely decided on $50 million, decision tht sved estte more thn $20 million in txes. Estée Luder Compnies went public in 1995, nd Ronld Luder nd his mor cshed in hundreds of millions of dollrs in stock but mnged to sidestep pying tens of millions in federl cpitl gins txes by using hedging technique known s shorting ginst box. Toger, Mr. Luder nd his mor borrowed 13.8 million shres of compny stock from reltives nd sold m to public during offering t $26 shre. Selling borrowed shres in this wy is referred to s short position. Since Luders retined ir own shres, mneuver llowed m to hve neutrl position in stock, not subject to price swings. Under I.R.S. rules t time, y voided pying s much s $95 million in cpitl gins txes tht might orwise hve been due hd y sold ir own shres. Such trnsctions llowed investors to csh in ir shreholdings without pying txes. But Luders use of technique ws so ggressive tht Congress encted lw fterwrd tht limited length of tx deferrl. And Luders eventully pid tens of millions in stock from trnsction. Still, fmily s tx plnning ws effective enough tht fter Estée Luder died in 2004, she pssed down nerly $4 billion to her heirs, ccording to tx experts who studied cse nd estimted tht estte ws txed t n effective rte of 16 percent bout third of top estte tx rte t time. Ronld Luder hs not been director of compny since 2009, but he still serves s president of its Clinique Lbortories subdivision. He lso sublets full floor of office spce from Estée Luder, on 42nd story of Generl Motors Building in Mnhttn, which serves s hub for mtrix of foundtions, investment funds, prtnerships nd trusts used to control his businesses nd personl finnces. His stke in Estée Luder Compnies, ccording to regultory filings, is vlued t more thn $600 million. Nerly $400 million of tht stock is pledged to secure vrious lines of credit. Mny finncil plnners consider it imprudent for principl shreholders in compny to borrow ginst ir stock. But it remins populr wy for welthy txpyers to get csh out of ir holdings without selling nd pying txes. There is certin irony tht Mr. Luder hs used $72 million worth of his Estée Luder shres to crry out his ltest stte-of--rt tx reduction tctic. These contrcts emerged s populr tool bout decde go nd were developed by ccountnts nd tx plnners fter Congress closed down loophole on Estée Luder public offering. The I.R.S. begn crcking down on se contrcts in 2008, nd hs pursued prominent cse ginst billionire Philip Anschutz, who used one to void more thn $140 million in federl txes. Wher or not I.R.S. grees with Mr. Luder s contention tht his contrct is legitimte, some tx policy experts sy del illustrtes how welthy tke dvntge of system. There s rel truth to ide tht tx code for 1 percent is different from tx code for 99 percent, sid Victor Fleischer, lw professor t University of Colordo. Any txpyer lucky enough to hve pprecited property is usully put to choice: csh

5 out nd py some tx, or hold property nd risk vgries of mrket. Only truly rich cn use derivtives to get best of both worlds lots of csh nd very little risk. While Mr. Luder s stock holdings in publicly trded compnies show some of his tctics, much of his welth is hrder to exmine becuse it is controlled by mze of privtely held trusts nd compnies. Court documents, S.E.C. filings nd property tx records spotlight few of more ordinry tx breks used by ffluent people. Significnt portions of his inherited stock re held in fmily trusts, which reduce ultimte estte tx. Mr. Luder nd his wife hve lso estblished ir own fmily trusts, llowing m to bequeth ir welth to ir heirs with miniml txes. Or trusts nd prtnerships control his rel estte properties in Plm Bech nd Hmptons nd t 740 Prk Avenue, building tht ws once home to John D. Rockefeller, nd is known s one of world s welthiest prtment buildings. United Sttes tx lw llows txpyers to deduct mortgge interest on one s homes up to $1.1 million in debt. Households with more thn $1 million in income climed more thn $27 billion in such deductions from 2006 to 09, ccording to report this month by Sentor Tom Coburn of Oklhom, who sid some welthy txpyers even deducted mortgge interest on ir ychts. And re is no limit on mount of property txes tht cn be deducted from federl income. So Mr. Luder is entitled to deduct $400,000 he pys nnully on his Plm Bech mnsion s well s wht he pys on his home on Prk Avenue nd his holdings in Hmptons. This welfre for well-off costing billions of dollrs yer is being pid for with txes of less fortunte, mny who re working two jobs just to mke ends meet, nd i.o.u. s to be pid off by future genertions, sid Sentor Coburn, Republicn, who hs clled for limits on tx breks for high erners. Mr. Luder deducts property txes on ll of his holdings, his spokesmn sid. Mr. Luder declined to sy how much tht reduced his federl txes, but sid he did not receive tx benefits in some yers becuse of lterntive minimum tx nd or limits. Chrity nd Tx Breks A week before opening t Neue Glerie lst month, Mr. Luder ppered t nor gl, 40 blocks south, t New York Public Librry, to receive Crnegie Foundtion s Medl of Philnthropy. The progrm honored people who hve given profusely to chrities, including Mr. Luder s bror Leonrd nd his wife, Evelyn (who died Nov. 12), whose cuses include Whitney Museum nd pink ribbon cmpign for brest cncer wreness. Ronld Luder nd his wife, Jo Crole, were honored for vriety of contributions: work of ir joint foundtion supporting hospitls, rebuilding monuments nd refurbishing Americn embssies round world more thn qurter of billion dollrs over lst five yers, ccording to his spokesmn. The Ronld S. Luder Foundtion hs donted tens of millions of dollrs to rebuild Jewish communities devstted by Holocust nd communist rule. Mr. Luder hs lso given to vriety of Jewish nd Isreli orgniztions, including World Jewish Congress, where he hs served s president since Richrd Prsons, former Time Wrner chirmn, presented wrd, clling Mr. Luder nd his wife two of ntion s pre-eminent supporters of rts nd civic cuses. Mr. Luder sid his life ws chnged 25 yers go when he visited kindergrten in Austri nd met clssroom full of Jewish children who were refugees from Russi. Still, he sid he found it odd to be referred to s philnthropist. I did wht I wnted to do, he sid. Wht I thought ws right. A Pssion for Art In United Sttes, Mr. Luder hs focused on wht he clls his gretest pssion rt. In 1976, t ge 32, his generous dontions helped him become youngest trustee of Metropolitn Museum of Art. He lter served s chirmn of Museum of Modern Art nd remins n honorry chirmn. He hs donted nd lent rtwork to n ssortment of museums. Prt of his collection of lvishly decorted ceremonil rmor is on disply t Met, in gllery nmed for him. As ll rt collectors my, Mr. Luder is enti-

6 tled to deduct full mrket vlue of rtworks donted to museums. (For yers, Mr. Luder viled himself of quirk in tx code tht llowed donors to tke deduction for donting portion of n rtwork, without ctully turning over rt. Tht brek, known s frctionl dontion, ws eliminted in 2006.) Unlike some welthy collectors who re criticized for using tx breks to underwrite privte collections tht offer little ccess to public, Mr. Luder is widely prised for mking his rtwork community sset. The Neue Glerie, creted by Mr. Luder nd Serge Sbrsky, who died in 1996, in mnsion once owned by Grce Wilson Vnderbilt, widow of Cornelius Vnderbilt III, offers public viewing of n exquisite collection, worth more thn $200 million even before Mr. Luder dded dozens of pieces for its 10th nniversry. Sheldon Cohen, former I.R.S. commissioner, sid tht when used s intended, tx code s breks for rt collectors blnce privte interests with public good. If n rt collector mkes significnt contributions, nd public ctully gets ccess to works y re donting, n mjor thing collector gets is prestige nd socil sttus, sid Mr. Cohen, now lwyer in Wshington. At times, Mr. Luder s efforts to enhnce his rt collection hve coincided with tx voidnce techniques. In 2006, three months fter he greed to py $135 million, record t time, for Klimt pinting Adele Bloch-Buer I, Mr. Luder sold $190 million stke in his brodcst network CME. When sked bout sle, Mr. Luder s spokesmn sid proceeds were txble in United Sttes t full cpitl gins rte. Even n, though, CME s complex corporte structure it opertes in Centrl Europe, is orgnized s Nerlnds holding compny, keeps its hedqurters in Bermud nd routed $190 million sle through two Cymn Islnd compnies llowed Mr. Luder to minimize txes in countries outside United Sttes where it does business. Some tx reform dvoctes sy tht it is unfir tht welthiest cn subsidize ir lifestyles using myrid offshore mneuvers nd complex ccounting strtegies. It s dmirble when people bck ir chritble impulses up with dontions, sid Scott Klinger, tx policy director of group Business for Shred Prosperity. But tx code shouldn t llow welthy kind of loopholes tht let m, essentilly, force or txpyers to underwrite dontions to ir pet cuses. n This rticle hs been revised to reflect following correction published on December 9, 2011: An rticle on Nov. 26 bout tx strtegies used by businessmn nd philnthropist Ronld S. Luder referred imprecisely to tx tretment of rt in commercil settings. While purchse of decortive rt or lese pyments on rented rt my be deducted or deprecited s business expense, cost of cquiring fine rt like exmples in Mr. Luder s collection is generlly not deductible. The rticle lso misidentified previous owner of Fifth Avenue mnsion tht is now Neue Glerie. It ws owned by Grce Wilson Vnderbilt, widow of Cornelius Vnderbilt III, not by Corneli Vnderbilt. Also, picture with n erlier version of this rticle ws published in error. It showed house owned by Leonrd A. Luder in Plm Bech, Fl., not one owned by Ronld S. Luder.