Pine sculpture pedestal sells for $320,500

A pine sculpture pedestal designed by Isamu Noguchi sold for $320,500 at an auction that happened on December 15. Market experts had predicted that the rare item would sell for between $3,000 and $5,000, according to Forbes.

In referring to the $320,500 that was raised for the item at the sale, Wright auction house founder Richard Wright told the media outlet that "it’s what can happen."

He added that "one thing I love about auctions is that when you get rare material you’re letting the market decide what it’s worth."

The item was sold to a collector of fine art who felt compelled to have the pedestal, the media outlet reports. Many similar pedestals created by the designer can be viewed at The Noguchi Museum in Long Island. These items were designed to support stone sculptures.

According to the media outlet, the Noguchi pedestal managed to garner significant attention during the auction, and stole a lot of focus from a Frank Lloyd Wright home in Illinois, which was the lead item in the "Important Design" sale. A community organization called the Laurent House Foundation purchased the house for $578,500. The group plans to use the home as a museum. While other parties expressed interest in the dwelling, nobody wanted to outbid the community-based group.

Richard Wright happened upon the pedestal by chance, the media outlet reports. He received the item from his partner, David Heath. The item had been used as a table at Heath's Atlanta art gallery. The pedestal became of interest to Wright when he asked Heath about consigning some chairs.

"Noguchi approaches the decorative arts in the same spirit as he approaches his sculptures," Wright told the media outlet. "This pedestal shows his perfect feel for material, a great feel for salvaged wood. The simple way he expresses his art, to me it’s magical."

Individuals can realize tax benefits when buying and selling collectibles such as the Noguchi pedestal by setting up 1031 exchanges with a qualified intermediary such as Strategic Property Exchanges, LLC.

Although various benefits can be derived from setting up a 1031 exchange, one major draw is that investors who use the transactions can defer taxation on the item sold. Postponing paying income taxes  will allow them to retain all the equity that existed when the item was sold.

The benefit of retaining this equity is most easily exemplified by its impact on debt payments. These payments are made out of operating income, which can be taxed at rates as high as 40 percent. An investor who retains all equity in the collectible sold will need less leverage to purchase the replacement item. This lowering of debt will cut both interest costs and debt payments.

To provide an example, lets say that an investor owned a rare collectible worth $300,000 and wanted to sell it. The individual finds a replacement collectible that will qualify as part of a like-kind exchange. He finds a buyer for his collectible, and then works with a qualified intermediary to set up a 1031 exchange on the sale. He avoids paying income taxes on the pedestal sold, and retains all equity in the original item.

One final benefit of setting up 1031 exchanges with qualified intermediaries is that there is no limit on the number of times they can be used. An individual who owns collectibles such as these can take advantage of market opportunities whenever they present themselves.