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Nxxx,2011-11-27,A,001,Bs-BK,E3 C M Y KC M Y K Nxxx,2011-11-27,A,001,Bs-BK,E3 Late Edition Late Edition Late EditionToday, periodic cloudsLate andEdition sun, Today, periodic clouds and sun, quite mild, high 63. Tonight, partly quite mild, high 63. Tonight, partly Today, periodic clouds and sun,Today, periodic clouds and sun, to mostly cloudy, mild, low 52. To- to mostly cloudy, mild, low 52. To- quite mild, high 63. Tonight, partlyquite mild, high 63. Tonight, partly morrow, cloudy, still mild, high 63. morrow, cloudy, still mild, high 63. to mostly cloudy, mild, low 52.Late To-to Editionmostly cloudy, mild, low 52. To-Late Edition morrow, cloudy, still mild,Details, high 63. SportsSunday, Page 12. Details, SportsSunday, Page 12. Today, periodicmorrow, clouds cloudy, and sun, still mild,Today, highperiodic 63. clouds and sun, C M Y K Nxxx,2011-11-27,A,001,Bs-BK,E3 Details, SportsSunday, Page 12. quite mild, highDetails, 63. Tonight, SportsSunday,partly quite Page mild, 12. high 63. Tonight, partly to mostly cloudy, mild, low 52. To- to mostly cloudy, mild, low 52. To- VOL. CLXI . . No. 55,602 VOL.© 2011 The CLXI New York . . Times No. 55,602 NEW YORK,© 2011 The SUNDAY, New York Times NOVEMBERNEW 27, YORK, 2011 SUNDAY, NOVEMBER$6 beyond the greater 27, 2011 New York metropolitan area. $6 beyond$5.00 the greater New York metropolitan area. $5.00 morrow, cloudy, still mild, high 63. morrow, cloudy, still mild, high 63. VOL. CLXI . . No. 55,602 © 2011 The New York Times NEW YORK, SUNDAY, NOVEMBER 27, 2011 Late Edition$6 beyond the greater New York metropolitan area. Details, $5.00 SportsSunday, Page 12. VOL. CLXI . . No. 55,602 © 2011 The New York Times NEW YORK, SUNDAY, NOVEMBERToday, periodic clouds 27, and sun,2011 $6 beyond the greater New York metropolitan area. Details,$5.00 SportsSunday, Page 12. quite mild, high 63. Tonight, partly to mostly cloudy, mild, low 52. To- morrow, cloudy, still mild, high 63. NEWS ANALYSIS NEWS ANALYSIS VOL. CLXI . . No. 55,602 © 2011 The New York Times NEW YORK, SUNDAY, NOVEMBERDetails, SportsSunday, 27, 2011 Page 12. $6 beyond the greater New York metropolitan area. $5.00 VOL. CLXI . . No. 55,602 © 2011 The New York Times NEW YORK, SUNDAY,NEWS ANALYSIS NOVEMBER 27, NEWS2011 ANALYSIS NATO$6 STRIKES beyond the greater KILLNew York metropolitan area.NATO STRIKES$5.00 KILL VOL. CLXI . . No. 55,602 © 2011 The New York Times NEW YORK, SUNDAY, NOVEMBER 27, 2011 $6 beyond the greater New York metropolitan area. $5.00 NATO STRIKES KILL Post-Uprising,NEWS ANALYSIS Post-Uprising,NATO STRIKES KILL NEWS ANALYSIS Post-Uprising, NATOPAKISTANINEWS STRIKES ANALYSIS KILL FORCES, PAKISTANI FORCES, NATO STRIKES KILL A Post-Uprising,NewPAKISTANI Battle FORCES,PAKISTANIA New FORCES,BattleNATO STRIKES KILL Post-Uprising, PAKISTANIA New FORCES, BattlePost-Uprising, A New Battle A New BattlePost-Uprising,PAKISTANIRAISING FORCES, TENSIONS RAISING TENSIONS RAISING TENSIONS ArabA New WorldRAISING Battle Struggles TENSIONSArabRAISING World TENSIONS StrugglesPAKISTANI FORCES, Arab World Struggles Arab World StrugglesTo ShapeArab a NewWorld Order StrugglesARAISING New TENSIONS Battle To Shape a New Order AT LEAST 25 SOLDIERS DIE AT LEASTTo 25Shape SOLDIERS a New DIE Order To Shape a New OrderArab World Struggles RAISINGAT LEASTTENSIONS 25 SOLDIERS DIE By ANTHONY SHADID To ATShape LEAST a New25 SOLDIERS Order DIE Anger in Islamabad — To Shape a New Order AT LEAST 25 SOLDIERS DIE CAIRO — Through elections, By ANTHONY SHADID protests, government formations U.S. Offers Regrets ATArab LEAST World 25 SOLDIERS ByStruggles ANTHONY DIE SHADID and armed struggle, Arab coun- Anger in Islamabad — Anger in Islamabad — tries in an arc from Libya to the and VowsBy ANTHONY Inquiry SHADIDCAIRO — ThroughBy ANTHONY elections, SHADIDTo Shape aCAIRO New — Order Through elections, gulf were engaged this past week By ANTHONYAnger SHADID in Islamabad — more than ever in attempts not to protests, government formations U.S.protests,Anger Offers government in Regrets Islamabad formationsAT LEAST — 25 SOLDIERS DIE CAIRO — Through elections, CAIRO — Through elections,Anger in Islamabad — U.S. Offers Regrets simply overthrow leaders, but to By SALMAN MASOOD andCAIRO armed — Throughstruggle, elections, Arab coun- and armed struggle, Arab coun- decisively shape the orders that protests,and ERIC SCHMITT government formationsprotests,U.S. government Offers formations Regrets follow. protests,tries in an government arc from formationsLibya to the and VowsU.S. OffersInquiry Regrets andISLAMABAD, armed Pakistan struggle, — Pa- Arab coun- U.S.By ANTHONY Offerstries in Regrets SHADIDan arc from Libya to the and Vows Inquiry The center of that struggle was kistani officials said on Saturday andgulf armed wereand struggle,engaged armed Arab this struggle, pastcoun- week Arab coun- gulf were engaged this past week again in Cairo, in the landmark thattries NATO in aircraft an arc had killedfrom at Libya to the and Vows Inquiry Anger in Islamabad — Tahrir Square, where a protest tries in antries arc from in an Libya arc fromto the LibyaCAIRO to theand — Vows Through Inquiryand elections, Vows Inquiry leastgulf 25 soldiers were in engagedstrikes against this pastmore week than ever in attempts not to more than ever in attempts not to movement was revived and doz- two military posts at the north- gulf were engaged this past week ens were killed in violence. Some simply overthrowgulf were engagedleaders, butthis to protests,past week government formations westernmore border than with ever Afghani- in attempts not to Bysimply SALMAN overthrow MASOOD leaders, butU.S. to OffersBy Regrets SALMAN MASOOD hailed it as a new revolution, or stan, and the country’s supreme more thanmore ever inthan attempts ever in not attempts to and armed not to struggle, Arab coun- the opening of a front in the old decisively shape the orders that decisivelyand ERIC SCHMITT shape the orders that and ERIC SCHMITT armysimply commander overthrow called them leaders,simply but overthrow to leaders,By SALMAN but to MASOODBy SALMAN MASOOD one. But it might be better unprovoked acts of aggression in follow. simply overthrow leaders,tries but in anto arc from LibyaBy SALMAN to the MASOODand Vows Inquiry termed the end of the beginning, decisively shape the ordersdecisively that shape the ordersand ERICthat SCHMITTandISLAMABAD, ERICfollow. SCHMITT Pakistan — Pa- a new flash point between the decisively shape the ordersgulf were that engaged thisand past ERIC week SCHMITT ISLAMABAD, Pakistan — Pa- as within the span of just a week, United States and Pakistan. The center of that struggle was The center of that struggle was events breaking out here and follow. follow. kistani officials said on Saturday The Pakistani government re- follow. ISLAMABAD, PakistanISLAMABAD, — Pa- Pakistan — Pa- kistani officials said on Saturday across the region seemed as sem- again in Cairo, in the landmarkmore than ever in attempts not to spondedThe by orderingcenter the of Central that struggleThe centerwas of that struggle was againISLAMABAD, in Cairo, in the Pakistan landmark — Pa- inal as any since that burst of op- kistanithat officials NATO said aircraft on Saturday had killed at that NATO aircraft had killed at BEBETO MATTHEWS/ASSOCIATED PRESS Intelligence Agency to vacate the Thekistani center officials of that strugglesaidsimply on wasSaturday overthrow leaders, but to By SALMAN MASOOD timism when the revolts erupted againTahrir in Square, Cairo, in wherethe landmark a protest Tahrirkistani Square, officials where said aon protest Saturday In 2006, Ronald S. Lauder, who is now worth $3.1 billion, paid $135 million for the Klimt painting “Adele Bloch-Bauer I.” droneagain operations in Cairo, it runs in from the landmark that least NATO 25 aircraft soldiers had in killedstrikes at against least 25 soldiers in strikes against 11 months ago. againthat in Cairo, NATO in aircraftthe landmarkdecisively had killed shape at the orders that Shamsi Air Base, in western Pa- Tahrirmovement Square, was where revived a protest and doz- movement was revived and doz-and ERIC SCHMITT “In January, it was an uprising Tahrir Square, where a protest leasttwo 25 soldiers militarythat in strikes NATO posts against ataircraft the north- had killed at kistan, within 15 days. It also Tahrir Square, where a protest two military posts at the north- against the dictatorship, and now movementens were killedwasleast revived in violence. 25 andsoldiers doz- Some infollow. strikes against closed the two main NATO sup- two militaryens least posts were 25 at soldierskilled the north- in inviolence. strikesISLAMABAD, Someagainst Pakistan — Pa- it is an uprising against what is movement was revived and doz- western border with Afghani- western border with Afghani- ply routes into Afghanistan, in- ens were movementkilled twoin violence. military was revivedSome posts and The at doz- the center north- of that struggle was A Family’s Billions, Artfully Sheltered left of that dictatorship,” said hailed it as a new revolution, or western borderhailedtwo with military it as Afghani-a new posts revolution, at the north-or cludingens were the one killed at Torkham. in violence. Some stan, and the country’s supremekistani officials said on Saturday Sateh Noureddine, a columnist in hailed it asens a new were revolution, killed in orviolence. Some stan, and the country’s supreme NATO forces receive roughly 40 the opening ofwestern a front in border the old again withstan, in and Afghani- Cairo, the country’sin the landmark supreme the leftist Lebanese newspaper hailed it as a new revolution, or thewestern opening border of a front with in thatthe Afghani- old NATO aircraft had killed at percent of their supplies through the opening of a front in the old army commander called them army commander called them Al Safir. “The fall of regimes was hailedstan, it as anda new the revolution, country’sTahrirarmy or Square, supreme commander where called a protest them Estée Lauder Heir’s Tax Strategies Typify Advantages for the Wealthy that crossing, which runs one. But it might be better one.stan, But and it might the country’s be better supreme not the revolution, but just a way the opening of a front inone. the But old it might be better unprovoked acts of aggressionleast in 25 soldiers in strikes against through the Khyber Pass, and Pa- the openingarmy commanderof a front in theunprovok called old ed them acts of aggression in unprovoked acts of aggression in to establish the foundations for termed the end of the beginning,movement wastermed revived the andend doz-of the beginning, By DAVID KOCIENIEWSKI stock deal so audacious that Congress lat- kistanone. gave But no estimateit might for how be bettertermed the end of the beginning, a new flasharmy point commander between called thetwo military them posts at the north- the Arab Spring. Freedom and a new flash point between the a new flash point between the BUT NOBODY PAYS THAT er enacted a law forbidding the tactic, Mr. long the routes might be shut as withinone. the But unprovokspan it ofmight justed a beacts week, better ofens aggression were killed in in violence. Some As he stood in the opulent marble foyer democracy need time.” as within the span of just a week, asunprovok within theed spanacts of justaggressionwestern a week, in border with Afghani- Fighting for Tax Breaks Lauder has for decades aggressively tak- down.termed the end of the beginning, UnitedUnited States States and Pakistan. and Pakistan. United States and Pakistan. of a Fifth Avenue mansion late last month, No one expected the Arab re- termeda newthe end flash of the point beginning,hailed between it as a thenew revolution, or en advantage of tax breaks that are useful A NATO spokesman said it was eventsevents breaking breaking out out here here and and eventsa new breaking flash point out here between and the greeting the coterie of prominent guests volts to be a simple march ahead, as within the span of just a week, The Pakistani government stan, re- and the country’s supreme only for the most affluent. likely that allied airstrikes as withinUnited the States span ofand just Pakistan. aThe week, Pakistani government re- The Pakistani government re- arriving at his private art gallery, Ronald but rarely have things seemed so acrossacross the the region region seemed seemed as sem- as sem-the opening of a front in the old shrewd use of the United States tax code. The debate over whether to reduce tax causedevents the Pakistani breaking casualties, out here and acrossUnited the States region and seemed Pakistan.army as sem- commander called them S. Lauder was doing more than just being much in flux, with more potential spondedsponded by ordering by ordering the Central the Central sponded by ordering the Central By donating his art to his private founda- shelters and preferences for the rich is but said an investigation had inalinal as as any anyevents since since that breakingThe that burst Pakistani burst of out op- of here op- governmentone. and But it might re- be better a gracious host. for fragmentation, bloodshedBEBETOBEBETO andMATTHEWS/ASSOCIATED MATTHEWS/ASSOCIATED PRESS PRESS inalThe as any Pakistani since that government burst of op- re- tion, Mr. Lauder has qualified for de- beenacross ordered the to determine region the seemed as sem-BEBETO MATTHEWS/ASSOCIATED IntelligencePRESSIntelligence Agency Agency to vacate to thevacate theunprovoked acts of aggression in To celebrate the 10th anniversary of the one of the most volatile in Washington and disarray. While many analysts timism whenacross thesponded revoltsthe region eruptedby seemedorderingtermed as the sem- theCentral end of the beginning, Intelligence Agency to vacate the ductions worth tens of millions of dollars will move to the presidential campaign, cause. timism when the revolts erupteddrone operationstimismsponded it when runs by theordering from revolts the erupted Central In 2006, RonaldNeueIn Galerie, 2006, S. Lauder, Mr. Ronald Lauder’s museumwho S. Lauder, is of nowin federalwho worth incomeis now $3.1 taxes worth overbillion, the $3.1 years, paid billion, $135 paid million $135 million for the for Klimt thedescribe Klimt painting the painting disturbances “Adele “Adeleas an Bloch-Bauer inalBloch-Bauer as any since I.” I.” that burst of op- drone operations it runs froma new flash point between the In 2006, Ronald S. Lauder,now that repeated who attempts is now inBEBETO Congress worth MATTHEWS/ASSOCIATED to $3.1 billion, paidPRESS $135 Inmillion Washington, for American the offi-Klimt 11painting monthsinal ago. “Adele asIntelligence any Bloch-Bauer since that Agency burst I.” to of vacate op- the drone operations it runs from Austrian and German art, he exhibited savings that help defray the hundreds of inevitable reckoning with the leg- BEBETO MATTHEWS/ASSOCIATED PRESS11 months ago. asShamsi within Air the Base,11 span months in of westernjust ago. a week, Pa- strike a grand bargain over spending cuts cialstimism were scrambling when tothe assess revolts erupted Intelligence Agency toUnited vacate Statesthe and Pakistan. many of the treasures of a personal col- millions he has spent creating one of New acy of dictatorship, others worry “In January,timism it was when an uprisingthe revolts eruptedShamsi Air Base, in western Pa- Shamsi Air Base, in western Pa- In 2006, Ronald S. Lauder, who is now worth $3.1 billion, paid $135 million for theand Klimt an overhaul painting of the tax “Adele code have Bloch-Bauer I.” what had happened amid prelimi- “In January,drone it was operations an uprisingevents kistan, it runs breaking within from 15 out days. here Itand also In 2006,lection valued Ronald at more thanS. Lauder,$1 billion, in- whoYork City’s is nowcultural gems.worth $3.1 billion, paid $135 million for thethe region Klimt may face painting years of un- “Adele11 months Bloch-Bauer ago. I.” against the dictatorship, and now kistan, drone within“In January, operations 15 days. it was It it an also runs uprisingThe from Pakistani government re- cluding works by Van Gogh, Cézanne and failed. rest before systems emerge to re- nary reports that allied forces in 11 monthsShamsi ago. Air Base,across in western the region Pa- seemed as sem- kistan, within 15 days. It also The charitable deductions generated by Afghanistan engaged in a fire- against the dictatorship, and nowclosed the twoagainstShamsi main the NATOAir dictatorship, Base, sup- in western and now Pa- Matisse, and a Klimt portrait he bought Mr. Lauder — whose donations have aid- A handful of billionaires like Warren E. place the stagnant, American- “In January, it was anit uprisingis an uprising against what is closed the two main NATO sup-sponded by orderingclosed the the two Central main NATO sup- A Family’s Billions,Buffett and Bill GatesArtfully have joined Demo- Shelteredfight along the border and called “Inkistan, January, within it was 15aninal plyuprising days. as routes any It since alsointo Afghanistan,that burst of in-op- five years ago for $135 million. backed order that held sway for it is an uprising against what is ed causes as varied as hospitals and ef- in airstrikes. Senior Obama ad- BEBETOleft MATTHEWS/ASSOCIATEDof that dictatorship,” PRESS said itkistan, is an uprising within against 15 days. what It is also Yet forA Mr. Lauder, Family’s an heir to the Estée Billions,crats Artfully in calling for an elimination of the Sheltered against the dictatorship, and now ply routes into Afghanistan, Intelligence in- Agency to vacate the forts to rebuild Jewish identity in EasternA Family’s Billions,Continued on Page 12 Artfully Shelteredagainst the dictatorship,cluding and now the one at Torkham. ply routes into Afghanistan, in- ministration officials were also closed the two maintimism NATO when sup- the revolts erupted Lauder fortune whose net worth is esti- breaks, saying that the current system Satehleft of Noureddine, that dictatorship,” a columnist said in leftclosed of that the dictatorship,” two main NATO said sup- In 2006,Europe Ronald — are justS. one Lauder, facet of a sophis- who is now worth $3.1 billion, paid $135 million forweighing theit is Klimtan the uprising implications painting onagainst a “Adele what Bloch-Bauer is I.” NATOcluding forces receive the one roughly at Torkham.40 drone operationscluding it the runs one from at Torkham. A Family’smated at more Billions, than $3.1 billion, the ticated tax strategyArtfully used to preserve a for- adds Sheltered to the budget deficit, contributes to Sateh Noureddine,it is anply uprising routes a columnist against into Afghanistan, 11in what months is ago. in- A Family’s Billions,the widening income Artfully gap between the Shelteredrelationshipleft of that that tookdictatorship,” a sharp the said leftist Lebanese newspaper Satehply routes Noureddine, into Afghanistan, a columnistShamsi inAir in- Base, in western Pa- evening went beyond social and cultural tune that Forbes magazine says makes Anger After Death in Cairo turn for the worse after a Navy left of that dictatorship,”percent saidNATO of their forces supplies receive through roughly 40 NATO forces receive roughly 40 significance. As isEstée often the case Lauder with his him the Heir’s world’s 362nd Tax wealthiest Strategies person. richest and theTypify rest of society, Advantages and shifts for the Wealthy Althe Safir. leftist “The Lebanese fallcluding of regimes newspaper the was one “In at January, Torkham.the it leftist was an Lebanese uprising newspaper Fears of fresh clashes were SealSateh commando Noureddine, raid killed Osa- a columnist in that percent crossing, cludingof their which supplies the runs one through at kistan, Torkham. within 15 days. It also activities, just beneath the surface was a From offshore havens to a tax-sheltering Continued on Page 20 ma bin Laden near Islamabad in not the revolution,SatehNATO Noureddine, but just forces a way a receive columnistagainst roughly the in dictatorship, 40 and now percent of their supplies through Estée Lauder Heir’s Tax StrategiesEstée Lauder Typify Heir’s Advantages Tax Strategiesstirred for after security the forces TypifyWealthy killed the leftistAdvantages Lebanese newspaperAl for Safir. the “The Wealthyfall of regimes wasthrough the KhyberAlNATO Safir. Pass, forces“The and fall receivePa- of regimes roughlyclosed was the 40 two main NATO sup- an unarmed protester. Page 6. Continued on Page 10 to establishthe the leftist foundations Lebanese for newspaperthat crossing, which runs that crossing, which runs By DAVID KOCIENIEWSKI stock deal so audacious that Congress lat- not the revolution,percent but of just their a way suppliesit kistanis an uprising gavethrough not nopercent estimateagainstthe revolution, of what fortheir how is supplies but just througha way Estée Lauder Heir’s Tax Strategies TypifyA Family’s Advantages forBillions, the Wealthy ArtfullyAl Safir. Sheltered “The fall of regimesthe Arab was Spring. Freedom and through the Khyber Pass, and Pa-ply routes intothrough Afghanistan, the Khyber in- Pass, and Pa- Estée Lauder Heir’s TaxBUT Strategies NOBODY PAYS THAT Typify Advantageser enacted afor law forbiddingthe Wealthy the tactic, Mr. to establishAl Safir. thethat foundations “The crossing, fall of forregimes leftlong which of wasthat the dictatorship,” routes runs might besaid shut By DAVIDAs KOCIENIEWSKI he stood in the opulent marble foyerBy DAVID KOCIENIEWSKI stock deal so audacious thatnot Congress the revolution, lat- stock but justdemocracy deal a soway audacious need time.” that Congress lat-kistan gavetothat establish no crossing, estimate the foundations for which howcluding for runs the one at Torkham. Fighting for Tax Breaks Lauder has for decades aggressively tak- the Arabnot Spring. thethrough revolution, Freedom the Khyber andbut justSatehdown. Pass, a wayNoureddine, and Pa- a columnist in kistan gave no estimate for how N.B.A.of a Fifth Reaches Avenue mansionTV Attack late last Ads month,BUT NOBODYAcross PAYS Party THAT Lines, LobbyingBUT forer NOBODY enacted Iranian PAYSa law Exiles THATforbidding onto Terroristestablishthe tactic, the Mr.List foundationsNo forone expected the Arab re- long thethethrough routesArab Spring.the might Khyber Freedom be Pass, shutNATO and and forcesPa- receive roughly 40 By DAVID KOCIENIEWSKIAs he stood in the opulent marble foyer As he stood in the opulentstock marble deal sofoyer audacious thaten Congress advantage lat- of tax breaks that are useful er enacted a lawto establish forbiddingkistan the gave the foundations notactic, estimatethe Mr. Aleftist forNATO for Lebanese spokesman how newspaper said it was long the routes might be shut greetingBy DAVID the KOCIENIEWSKI coterie of prominent guests Lauder hasstock for deal decades so audacious aggressivelythe Arab that Spring. Congress tak- Freedom lat-voltsdemocracy and to be a simple need time.”march ahead, democracykistan gave need no time.” estimate percent for how of their supplies through of a Fifth AvenueTentative mansion BUTDeal late NOBODY lastAim month, PAYS at Obama THATFighting for Tax Breaks er enacted a law forbiddingFighting onlythe for Taxtactic,for the Breaks mostMr. affluent. Lauder has forthe decades Arab Spring. aggressively Freedom likelytak- anddown. that allied airstrikes down. As he stood in the opulent marble foyerarriving at his private art gallery,Estéeof aRonald Fifth Lauder AvenueBUT NOBODY mansion Heir’s PAYS late Tax THATlast month, Strategies Typifyer enacted Advantages a law forbidding the for tactic, the Mr.but WealthyNo rarely one have expectedlong things thethe seemed Arab routes so re- Al might Safir. be“The shut longfallNo of one theregimes expected routes was mightthe Arab be re- shut greeting theAs coteriehe stood of in prominent the opulent guests marble foyer shrewdBy BySCOTT DAVIDuse SHANE of Lauderthe KOCIENIEWSKI United has States for decadestax code.en aggressively advantageThe debate of tak- tax over breaks whetherdemocracy that to are reduce useful need tax time.”en advantage democracyof tax breaks need that time.” are useful caused A the NATO Pakistani spokesman casualties, said it wasthat crossing,A NATO which spokesman runs said it was of a Fifth Avenue mansion late last month,S. LauderFighting was doing for more Tax Breaksthan greetingjust being theWASHINGTON coterie — of At a prominent time of guests Lauder has for decades aggressively tak-muchvolts into flux, be a with simpledown. more march potential ahead,not the revolution,volts to but be just a simple a way march ahead, of a ToFifth Save Avenue Season mansionEarly late last and month, Often FightingBy donating for Tax his Breaks art to his private founda-only forshelters the most and affluent. preferencesNo for one the expected rich is only the for Arab the re- most affluent. but likely said an down. that investigation allied had airstrikesthrough the Khyber Pass, and Pa- arriving at his aprivate gracious art host. gallery, Ronald arriving atpartisan his gridlockprivate in theart capital,en gallery, advantage Ronald of tax breaks that are useful forbut fragmentation, rarely haveNo one Athings bloodshed NATOexpected seemed spokesman and the so toArab establish saidre- it thewas foundations for likely that allied airstrikes greeting the coterie of prominentgreeting guests the coteries he stood of prominent in Bythe DAVID guestsopulentshrewd KOCIENIEWSKIone marbleuse obscuretion, of causethe Mr. foyer hasUnited Lauder drawn of a States has qualified tax code. forshrewd de- The oneuse debate enof of theadvantage the mostover United suresvolatile whether of States tax voltsinof Washingtonbreaksto a tax stock toreducepersonal be code. that adeal simple taxand are so usefulaudacious march ahead, that Congress lat- beencaused ordered but the to Ararely PakistaniNATOdetermine have spokesman things thecasualties, seemed kistansaid it wasso gave no estimate for how S. Lauder was doingTo celebrate more than the 10th just anniversary being of the stellar list of supporters only from for the most affluent. The debate voltsover towhether be a simple to reduce march tax ahead, caused the Pakistani casualties, arriving at his private art gallery, RonaldBy HOWARD BECK By JEREMY W. S.PETERS LauderBy donating wasductions doing his art worthmore to his tensthan private of just BUTmillions being founda- NOBODY of dollars PAYS THATonly for the most affluent. disarray.much in Whileflux, likely withmany more analysts that potential alliedthe Arab airstrikes Spring.much Freedom in flux, withand more potential arriving at his ashrewdprivate Fifth use artAvenue gallery,of the Unitedmansion Ronald States bothlate partiestax last code. and the month, last two ad- Byshelters donatingwill moveand his art preferences to to thecollection his presidential privatebut for rarely er thefounda- campaign,enacted valued richhave is thingsa law forbiddingseemed so the tactic, Mr. cause.but saidlikely an investigation that allied hadlong airstrikes the routes might be shut a gracious host.Six wearyNeue figures Galerie, rose from Mr. Lauder’sInsideAs he the stood debate museum halls,in the the of opulent marble foyerThe debate over whether to reduce tax sheltersdescribe and thebut preferences disturbances rarelycaused have the for as things thePakistanian rich seemeddemocracy is casualties, so need time.” but said an investigation had S. Lauder was doing more than just being a gracioustion, Mr.ministrations, host.shrewd in Lauder federal includinguse has incomeof a thedozen qualified United taxes over States for the de- tax years,tion, code. Mr. LauderThe debate has qualifiedover whetherLauder for de-to has reduce for decadestaxfor fragmentation, aggressively bloodshed tak- and In Washington,forcaused fragmentation, American the Pakistani offi- bloodshed casualties, and S. theirLauder chairsAustrian early was Saturday Bydoing and morn-donating German moreofclash a Fifth maythan his art, be art RepublicanAvenuejust he to exhibitedbeing his versus mansion privateformer toplatefounda- national last security month, offi- Fighting for Tax oneBreaks ofnow the that most repeated volatile attempts in muchWashington in inCongress flux, and with to one more ofinevitable potentialthe most reckoning volatile in with Washington the leg- andbeen ordered to determine thedown. been ordered to determine the To celebrateing, their the expressions 10thgreeting anniversary telegraph- Republican. the of coteriethe But offstage, of con- prominentBysavings donating that guests his helpshelters art defray to his and the private hundreds preferences founda- of for the rich isat more than $1 disarray.much Whilebut in many flux, said withanalysts an more investigation potentialNo one expected had the Arab re- a gracious host. A Toductions celebratecials. worth the tens10th anniversaryof millions of of dollars the ductionsstrike worthshelters a grand tens and bargainof millions preferences overfor fragmentation, ofspendingen dollars advantage for cuts the rich bloodshedof tax is breaks and that are useful cials were scramblingdisarray.but said While to an assess many investigation analystsA NATO had spokesman said it was cause. Neue Galerie,a graciousing the manyconclusion Mr. host. Lauder’s of to tion,the N.B.A.’s treasures Mr. museumgreetingservatives Lauder of are a themounting of personal has coterie a unified qualified col- of That prominentmillions alone for would de- he be has guests unusual. spent creating one of Newwill move to the presidential campaign, will moveacy of dictatorship, to for the fragmentation, been presidential others ordered worry campaign,bloodshed to determine and the cause. five-montharriving labor crisis: Basket-at hisand expensiveprivate air assaultNeue artin on federalthe Galerie,gallery,tion, income Mr. Mr.Ronald Lauder’s Lauder taxesone S. over of museumhas the the qualifiedmost years, of volatile for in de- Washingtonand an overhaul andbillion, of the taxincluding code have describe the disturbances as anvoltswhat to had be happened a simpledescribe amidmarch the prelimi- disturbances ahead, as an To celebrate the 10th anniversary oflection the valuedductions at more worth than tens $1 billion, of millions in- What ofYork makes dollars City’sit astonishing cultural is the gems. in now federal that one income repeated of the taxes mostattempts overvolatiledisarray. in the Congressonly in years, Washington Whilefor the to many most and analystsaffluent.the region may face years of un- In Washington,been ordered American to determine offi-likely the that allied airstrikes Austrian andballTo iscelebrate back German in business, the art, with 10th hea arriving candidates’ anniversary exhibited commonat his of opponent:private the object artductions of gallery, their attention: worth Ronald a fringewill tens move of millions to the of presidential dollars campaign, now that repeateddisarray. attemptscause. 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As is often the case with his him the world’s 362nd wealthiesthomeland person. security chief, Tom richest and the rest ofbreaks, society, sayingand shifts thatstirred theContinued after current security on system Page forces 20 killed ma bin Laden near Islamabadministration in ma officials bin Laden were near also Islamabad in significance.will begin Christmas As Dayis often with Lauderthe the camera case andfortune declares:with whosehis “Oba- Ridge; him net President the worth world’s Obama’s is esti- first362ndendingEurope wealthiest the terrorist — label are person.while just in tive one is humanitarian facet of — to a protect sophis-Emotions are running high as Seal commando raid killed Osa-stirred after security forces killed SecretaryFears of State of Hillary fresh Rod- clashes were Seal commando raid killedweighing Osa- the implications on a activities, just beneath the surfacethree was nationally a televisedFrom games. offshorema’s socialist havens policies areto bank- a tax-shelteringnational security adviser, Gen. office. Continued on Pageand resettle 20 about 3,400 members adds to the budgetan deficit, unarmed contributesFears protester. of fresh toPage clashes6. were Continued on Page 10 activities,For that, officials just on beneath both sides mated ruptingthe surface America. at moreWe was must stopa than From $3.1 offshore billion, havens the ticatedto a tax-sheltering tax strategy used to preserveContinued a for-ham Clinton on Page completes 20 a review ma bin Laden near Islamabadan in unarmed protester. Page 6. Continued on Page 10 N.B.A. Reaches TV AttackJames L. Jones; Ads big-name Re- TheAcross American advocates Party have of the group,Lines, known as the Lobbyingstirred after security for forces Iranian killedstirred after Exiles security forces on killed Terroristma bin Laden List near Islamabadrelationship in that took a sharp were grateful as they announced eveninghim now.” went beyond publicans social like and the formercultural New beentune well paid, that hired Forbes through M.E.K., magazine now confined says in a camp makesof an the unarmed terroristthe designation. widening protester. The income Page 6. gap betweenContinued the on Page 10 a resolution at 3:40 a.m., on the A new commercial from Mitt York mayor Rudolph W. Giuliani their speaking agencies and col- in Iraq. They say the terrorist la- government of Prime Minister an unarmed protester. PageAnger 6. 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Freeh; en- aIn former anVermont advertisement attorney governor gen- fromdeen Gov.Khalq, HowardFreeh; orVermont People’sfor a speeches former Mujahe- governor attorneyon behalf Howard gen-of the Ira-for speechesreflected on decades behalf ofof violencethe Ira- thatreflected decades of violence that that willContinued allow thein SportsSunday, richestBefore teams Page finally 4ing agreeing warformer yet.Continued to F.B.I. those on director, Page 4 Louisand J. Democrats like the formercounterterrorismlecting fees of $10,000 official to of$50,000 the bel,flown which tocounterterrorism Paris,dates to Berlin 1997 and and then official Brus- of Americans theContinuedflown on in Page to the Paris, 10 1970s, Berlin is now and Brus- Americans in the 1970s, is now to keep spending on players,suring en- a more In competitive an advertisement free- Rickfrom PerryGov.suring of a Texas more that competitive is nowhave free-eral, led toMichael Rick aformer spat PerryDean; B. with F.B.I.Mukasey; of and Demo- Texas director, even Presi- that deen, the Louis is former nowhas J.won eral, top the Michael niansupport group. B. of Mukasey;two SomeMujahedeen Presi- have been Khalqincluded supporters the and killing Secretary of some of State Hillary Rodham Clinton in Washington. to keep spending on players,sacrifices, en- the players’In Freeh;an advertisement negotia- a former from attorney Gov. gen- State Department,Dean; and Dell even L. theDailey, formersels top for appearances.nian group. Some have outdated, been included unjustified the and killing danger- of some outdated, unjustified and danger- suring a more competitiveagent free-market.Rick Perry of Texas thatrunning is nowagent on national market. cable televi-crats dentin what Georgerunning Freeh;is shapingcounterterrorism onW. a former nationalup Bush’s to be attorney cable first former official televi- gen- C.I.A. of dent the directors, flown George R. to James Paris, W. Bush’s Berlin andfirst Brus-State Department,Americans in Dell the L. 1970s,Dailey, is nowsels for appearances. suring a more competitivetors won free- a handfulRick eral,of Perry concessions Michael of Texas B. Mukasey; that is now Presi- who arguedcounterterrorism unsuccessfully official for of theBut theyflown insist to Paris, that their Berlin mo- and Brus-ous. Americans in the 1970s, is now ous. agent market. A truncatedrunning 66-game on schedule national cablesion, televi- Mr. PerryA truncated looks directly 66-game intothe schedule mosthomeland costlysion,eral, election securityMr. StateMichael Perry Department,advertis- chief,B. looks Mukasey; directly TomWoolsey Dell Presi- intoL. Dailey, andhomeland Portersels J.for security Goss; appearances. a chief, Tom who arguedoutdated, unsuccessfully unjustified and for danger-But they insist that their mo- agent market.INTERNATIONALthat 6-14 will allowrunning thedent richest on George national teams W.cable Bush’s televi- first NATIONAL 18-28ending theState terrorist Department, labelSUNDAY while DellVermont inL. BUSINESS Dailey, governorsels for appearances. HowardOPINION for speeches IN SUNDAYEmotions onoutdated, REVIEWbehalf are running ofunjustified the Ira- high and reflected as danger- decades of violence that A truncated 66-gamewill schedule begin Christmassion, Mr. Perry Day looks with directlythe camera intowill begin and declares: Christmas “Oba- Daying war withRidge; yet. thedent President camera who George argued Obama’s and W. declares: unsuccessfully Bush’s firstformer “Oba- first F.B.I. Ridge; for director, PresidentBut Louis they insist Obama’sJ. that tive first their is mo-humanitarianendingous. the terrorist — to protect label while in tive is humanitarian — to protect Emotions are running high as A truncated 66-gameto schedulekeep spendingsion, on homelandMr. players, Perry looks en- security directly chief, into Tom who argued unsuccessfullyDean; and for evenBut the they former insist top thatnian their Secretary group. mo- ous. Some of State have Hillary been Rod-included the killing of some will begin Christmas three Day withnationallythePerils televised camera of Commerce andgames. declares:ma’s in China “Oba- socialistthree nationally policiesBombs aretelevised Kill bank- at In games.Least annational advertisement 11 inma’shomeland Iraq security socialistending from adviser, securitythe Two policies Gov. terrorist Sides Gen. chief, areFreeh; onlabel bank- office.a Tom Railroadwhile a formernational in tive attorney security is humanitarian gen-Stealth adviser, Giant — Gen. andto protectof resettle Gunoffice. Industry aboutEmotions 3,400 members areNicholas running D. high Kristofand as resettle aboutPAGE 11 3,400 members Secretary of State Hillary Rod- will begin Christmas suring Day with a morethe competitive cameraRidge; and President free- declares:Rick Obama’s “Oba- Perry first of Texas that is now ending the terrorist labelcounterterrorism while in tive is official humanitarian of the —flown to protect ham to Paris, Clinton Emotions Berlin completes and are Brus- a running reviewAmericans high as in the 1970s, is now three nationally televisedFor games. that, officialsma’sAn engineer socialist on both and policies sides naturalized rupting are American bank-For America. that, officials Bombs We must exploded on stop both in and sidesJames around rupting L.Ridge; Bagh- Jones;office. America. President big-nameCalifornia’s We Obama’s Re-musteral, leaders Michael stop first haveThe rallied AmericanJames B. Mukasey; aroundand L. resettle advocates Jones; Presi-Many about big-name have major 3,400 gun of Re-members makers, the group,The includingSecretary American known the of advocates as State the Hillary have Rod-of the group, known as the ham Clinton completes a review were gratefulthree nationallyas they announced televisedagent games. market.ma’s national socialist security policies running are adviser, bank- on Gen. nationalnational cable security televi- adviser, Gen. office. State Department,and resettle Dell L. aboutDailey, 3,400sels members forof appearances. the terroristSecretary designation. of State Hillary Theoutdated, Rod- unjustified and danger- For that, officials on both sides ruptingcitizen found America. jail and We then musthim limbo now.” stop afterwere re- gratefuldad, as killing they at announced least 11publicans people, himas violence likenow.” The the American formera plan to Newbuild dent advocates a high-speed been George have wellpublicans rail W. paid,line of Bush’s de- the like hired group, the first195-year-old through former known Remington NewM.E.K., as been the nowArms, ham wellconfined have Clinton paid,qui- in hired a completes camp through a reviewM.E.K., now confined in a camp of the terrorist designation. The a resolutionFor that, at 3:40 officials a.m., on on the bothA truncated sidesA newrupting 66-game commercialJames America. schedule L. from Jones; We Mitt sion, must big-name Mr. stop Perry Re-James looks directly L. Jones; into big-name Re- The American advocateswho argued have of unsuccessfully the group, for known But asgovernment they the insistham that Clinton of Prime their completes mo- Ministerous. a review were grateful as they announced himturning now.” to China, highlighting thea perils resolutioncontinues at 3:40 in a.m., the weeks onYork the before mayor theA Amer- newRudolphbeen commercial wellspite W. paid,Giulianicries fromofhomeland hired boondoggle Mitttheir through speaking securityfromYork the mayorM.E.K., agencies chief, Rudolph now Tometly and confined passed W. col- Giuliani into in the Iraq. a camphandstheir They of speakingoneof say theprivate the terrorist terrorist agencies designation. la- and col- Thein Iraq. They say the terrorist la- government of Prime Minister were grateful as they announcedwill begin Christmashim now.”publicans Day with like thethe former camera New andpublicans declares: like “Oba- the former New been well paid, hiredending through the terroristM.E.K., label now while confined in U(D5E71D)x+&!{!/!=!# tive in a is camp humanitarianof the terrorist— to protect designation.Emotions The are running high as a resolution at 3:40 a.m.,Continued on the in SportsSunday,ofA doing new business commercial Page there. 4 from MittContinuedContinuedPAGE 6York onin icanmayor SportsSunday, Page withdrawal. 4Rudolph Page W.and Giuliani 4 DemocratsPAGEtheirContinued 10 like speaking project’s the on formerPage agenciescritics.Ridge; 4 lecting and President col-and fees Democrats ofinPAGE Obama’s $10,000Iraq. 18 They to firstcompany, like $50,000say the the the former terrorist Freedombel, whichlecting la-Group. datesgovernment fees toPAGE of1997 1 $10,000 and of then Prime to $50,000 MinisterContinuedbel, which on dates Page to 10 1997 and then Continued on Page 10 a resolution at 3:40 a.m.,three on nationally the A televised new commercial games. ma’s from socialist Mitt York policies mayor are Rudolph bank- W.national Giuliani securitytheir adviser,speaking Gen. agenciesoffice. and col- in Iraq. They say the terroristand resettle la- aboutgovernment 3,400 members of PrimeSecretary Minister of State Hillary Rod- Continued in SportsSunday, Page 4 Continued on Page 4 and Democrats like the former lecting fees of $10,000 to $50,000 bel, which dates to 1997 and then Continued on Page 10 Continued in SportsSunday,For Page that, 4 officials onContinued both sides on Pagerupting 4 America.and DemocratsWe must stop like theJames former L. Jones;lecting big-name fees of $10,000 Re- toThe $50,000 Americanbel, advocateswhich dates have to 1997of and the then group, knownContinued as theon Pageham 10 Clinton completes a review were grateful as they announced him now.” been well paid, hired through M.E.K., now confined in a camp of the terrorist designation. The INTERNATIONAL 6-14 INTERNATIONAL 6-14 NATIONAL 18-28publicans like the former NATIONALSUNDAY New BUSINESS 18-28 SUNDAYOPINION BUSINESS IN SUNDAY REVIEW OPINION IN SUNDAY REVIEW a resolution at 3:40 a.m., on the A new commercial from Mitt York mayor Rudolph W. Giuliani their speaking agencies and col- in Iraq. They say the terrorist la- government of Prime Minister INTERNATIONAL 6-14 NATIONAL 18-28 SUNDAY BUSINESS OPINION IN SUNDAY REVIEW Perils ofINTERNATIONAL Commerce in 6-14 ChinaContinued in PerilsSportsSunday,Bombs of Kill Commerce Page at Least 4 in 11 ChinainContinued Iraq on PageBombsTwo 4 Sides NATIONALKill on atand aLeast Railroad 18-28 Democrats 11 in Iraq like the formerTwoStealth SideslectingSUNDAY Giant on fees a ofBUSINESS Railroad ofGun $10,000 Industry to $50,000 StealthNicholasbel, whichOPINION Giant datesD. Kristof ofto IN Gun1997 SUNDAY and Industry then REVIEWPAGE 11 ContinuedNicholas on D. Page Kristof 10 PAGE 11 An engineer and naturalized American Bombs exploded in and around Bagh- California’s leaders have rallied around Many major gun makers, including the PAGE 11 Perils of Commerce in ChinaPerils of CommerceBombs Kill in at China LeastAn 11 engineer in IraqBombs and naturalized KillTwo at Least Sides American 11 on in a Iraq RailroadBombs explodedTwo Sides in and Stealthon around a Railroad Bagh-Giant of GunCalifornia’s IndustryStealth leaders Giant haveNicholas rallied of Gun around D. Industry KristofMany majorNicholas gun makers, D. Kristof including the PAGE 11 An engineer and naturalizedcitizen American found jail and thenBombs limbo exploded after re- in andcitizen dad,around killing found Bagh- at jail least and 11 then California’speople, limbo as afterviolence leaders re- havedad,a ralliedplan killing to around build at least a high-speed 11 people,Many majorrail as violenceline gun de- makers,a195-year-old plan including to build the Remington a high-speed Arms, rail haveline de- qui- 195-year-old Remington Arms, have qui- An engineer and naturalizedINTERNATIONAL American 6-14Bombs exploded in and around Bagh- California’s leaders haveNATIONAL rallied around 18-28 Many major gun makers,SUNDAY including BUSINESS the OPINION IN SUNDAY REVIEW turning to China, highlighting the perils turningcontinues to China,in the weekshighlighting before the the perils Amer- continuesspite cries in of the boondoggle weeks before from the the Amer- spiteetly passed cries of into boondoggle the hands from of one the private etly passed into the hands of one private citizen found jail and then limbo citizenafter re- found dad,jail and killing then at limbo least after11 people, re- as violencedad, killing ata least plan 11to people,build a high-speedas violence rail linea plan de- to build195-year-old a high-speed Remington rail line de- Arms, have195-year-old qui- Remington Arms, have qui-U(D5E71D)x+&!{!/!=!# of doing business there. PAGE 6 ofican doing withdrawal. business there. PAGE 106 icanproject’s withdrawal. critics. PAGEPAGE 10 18 project’scompany, critics. the Freedom Group. PAGEPAGE 18 1 company, the Freedom Group. PAGE 1 U(D5E71D)x+&!{!/!=!# turning to China, highlighting theturning perils to China,continues highlighting Perilsin the weeks the of perilsCommerce before thecontinues Amer- in China in thespite weeks cries beforeBombs of boondoggle the Kill Amer- fromat Least thespite 11 cries in Iraq of etlyboondoggle passedTwo into from theSides the hands on of a one Railroadetly private passed into the handsStealth of one privateGiant of Gun Industry Nicholas D. Kristof PAGE 11 PAGE 6 PAGE 10 PAGE 18 PAGE 1 U(D5E71D)x+&!{!/!=!# of doing business there. of doing businessican withdrawal.there.An engineer PAGE and 6 naturalizedican withdrawal. Americanproject’s critics.Bombs explodedPAGE 10 in andproject’s around critics.Bagh-company, theCalifornia’s FreedomPAGE leaders Group. 18 have company, rallied thearound Freedom ManyGroup. major PAGE gun 1 makers,U(D5E71D)x+&!{!/!=!# including the citizen found jail and then limbo after re- dad, killing at least 11 people, as violence a plan to build a high-speed rail line de- 195-year-old Remington Arms, have qui- turning to China, highlighting the perils continues in the weeks before the Amer- spite cries of boondoggle from the etly passed into the hands of one private of doing business there. PAGE 6 ican withdrawal. PAGE 10 project’s critics. PAGE 18 company, the Freedom Group. PAGE 1 U(D5E71D)x+&!{!/!=!# C M Y K C M Y K Nxxx,2011-11-27,A,020,Bs-4C,E1C M Y KNxxx,2011-11-27,A,020,Bs-4C,E1Nxxx,2011-11-27,A,020,Bs-4C,E1 C M Y K Nxxx,2011-11-27,A,020,Bs-4C,E1

20 N 20 N 20 N THE NEW YORK TIMESTHE NEW NATIONAL YORK TIMESSUNDAY, NATIONAL NOVEMBERSUNDAY,THE 27, 2011 NEW NOVEMBER YORK TIMES 27, 2011 NATIONAL SUNDAY, NOVEMBER 27, 2011 20 N THE NEW YORK TIMES NATIONAL SUNDAY, NOVEMBER 27, 2011

Billionaire’s PlaybookBillionaire’s for TaxPlaybook Avoidance for TaxTo AvoidancereduceBillionaire’s his taxes, ToRonald Playbook reduce S. Lauderhis taxes, for has Ronald usedTax manyS.Avoidance Lauder of the has techniques usedTo many reduce available of thehis taxes, techniquesto the Ronald wealthy available S. to Lauder shelter to thehas his wealthy usedincome many to while shelter of thestil lhis techniqueshaving income access whileavailable to stil hisl havingmoney.to the wealthyaccess toto hisshelter money. his income while still having access to his money. Billionaire’s Playbook for Tax Avoidance To reduce his taxes, Ronald S. Lauder has used many of the techniques available to the wealthy to shelter his income while still having access to his money. OFFSHORE CORPORATIONS NONPROFITOFFSHORE ORCORPORATIONS CHARITABLE FOUNDATION BORROWINGNONPROFIT AGAINSTOR CHARITABLE STOCK FOUNDATION FAMILYBORROWING TRUSTS AGAINST STOCK VARIABLEFAMILY TRUSTSPREPAID FORWARD CONTRACT VARIABLE PREPAID FORWARD CONTRACT OFFSHORE CORPORATIONS NONPROFIT OR CHARITABLE FOUNDATION BORROWING AGAINST STOCK FAMILY TRUSTS VARIABLE PREPAID FORWARD CONTRACT OFFSHORE CORPORATIONSThe broadcast companyThe Mr.broadcast Lauder NONPROFIT company Mr. OR CHARITABLELauder has FOUNDATIONdonatedMr.The Lauderextensively broadcast hasBORROWING from donatedcompany extensivelyMr. Mr.AGAINST Lauder Lauder STOCK hasfrom used Mr.hundredsMr. Lauder Lauder of has hasmillionsFAMILY used donated hundredsTRUSTSBy extensively creating of millions trustsfrom andByMr. putting creating Lauder family trustshasVARIABLE used and hundredsPREPAIDputtingThese familyFORWARDare of millionsagreements CONTRACT TheseBy to creatingsell are stock agreements trusts at a and to putting sell stock family at a These are agreements to sell stock at a The broadcastfounded, company CME Mr.Enterprises, Lauderfounded, operates CMEMr. Enterprises, Lauderan has operatesart donated collection extensively worthanfounded, moreart from collection than CME $1Mr. Enterprises,worth Lauder moreof has dollars operatesthan used $1worth hundreds of Estée ofan dollarsmillions Lauderart collection worth stockBy of ascreating worthEstée moreLauderholdings, trusts than stockand such $1 putting as as stock familyholdings,of anddollars real such worth estate,These as of stock Estéein are andfutureagreements Lauder real date estate,stock for to lessassell in stockthanfutureholdings, itsat date currenta suchfor value,less as thanstock its and current real estate, value, in future date for less than its current value, founded, CMEtelevision Enterprises, stations operates in televisionEurope but stations hasan art in collectionEuropebillion but worthto has his privatemore than foundation,billiontelevision $1 to his stationsentitling privateof dollars infoundation, Europe worthcollateral butof entitling Estée hasfor low-interest Lauder collateral billionstock loans. asto forhis That low-interest privateholdings, gives foundation, such thoseloans. as trusts, Thatstock entitling gives Mr.and Lauder realthosecollateral estate, and trusts, other in for Mr. futurelow-interest Lauder date inand for loans.return lessother Thatforthan an givesits immediate current inthose return value, cash trusts, for payment. an Mr. immediate Lauder andcash other payment. in return for an immediate cash payment. television stations in Europe butheadquarters has inbillion tax-friendly to his private Bermuda. foundation,him entitlingheadquarters to tax deductionscollateral in tax-friendly worth for low-interest tens Bermuda. of loans.him Thathim access togives tax todeductions moneythose trusts, without worth Mr. tenshaving Lauder of to and othermembershim access of histoin money familyreturn havewithoutfor an minimized immediate having to cashThese payment.members deals of postpone his family capital have gainsminimized taxes These deals postpone capital gains taxes headquarters in tax-friendly Bermuda. him to taxC deductionsM Y K worth tens of him accessNxxx,2011-11-27,A,020,Bs-4C,E1 to money without having to members of his family have minimized These deals postpone capital gains taxes headquarters in tax-friendly Bermuda. him to tax millionsdeductions of dollars. worth tensmillions of of dollars.him accesspay to capitalmoney gainswithout taxes havingpaymillions by capital sellingto of gains dollars.themembers stock. taxes by ofestate selling his family taxes. the stock.have minimized estatepay capital taxes. gains These taxes deals forby postpone sellingMr. Lauder. the capital stock. gains forestate Mr. taxes Lauder. taxes. for Mr. Lauder. millions of dollars. pay capital gains taxes by selling the stock. estate taxes. for Mr. Lauder. EstéeEstée Lauder LauderEstée Heir’s Lauder Heir’s20 Fortune, Heir’sEstéeNFortune, Lauder WorthFortune, Worth THEBillions,Heir’s NEW Worth YORKBillions, TIMES NATIONAL Fortune, IsBillions,SUNDAY, Artfully NOVEMBERIs Artfully 27, 2011 Worth Is Sheltered Artfully ShelteredBillions, Sheltered Is Artfully Sheltered Billionaire’s Playbook for Tax Avoidance To reduce his taxes, Ronald S. Lauder has used many of the techniques available to the wealthy to shelter his income while still having access to his money. From Page 1 From Page 1 From Page 1 OFFSHORE CORPORATIONS NONPROFIT OR CHARITABLE FOUNDATION BORROWING AGAINST STOCK FAMILY TRUSTS VARIABLE PREPAID FORWARD CONTRACT From Page 1 the tax burden onto small businessesThe broadcast companythe tax Mr. Lauder burden ontoMr. smallLauder has businesses donated extensively from Mr. Lauder has used hundreds of millions By creating trusts and putting family These are agreements to sell stock at a the tax burden onto small businesses founded, CME Enterprises, operates an art collection worth more than $1 of dollars worth of Estée Lauder stock as holdings, such as stock and real estate, in future date for less than its current value, the tax burdenand the onto middle small class. businessesand Republicans the middle haveclass. Republicanstelevision have stationsand in Europe the butmiddle has class.billion Republicans to his private foundation,have entitling collateral for low-interest loans. That gives those trusts, Mr. Lauder and other in return for an immediate cash payment. and the middleresisted, class. saying Republicans the resisted,tax increases have saying on the the tax increasesheadquarters on the in tax-friendlyresisted, Bermuda. saying the taxhim toincreases tax deductions on worth the tens of him access to money without having to members of his family have minimized These deals postpone capital gains taxes resisted, sayingwealthy the would tax increases harmwealthy the on economythe would harm and the economy and wealthy would harmmillions the of economy dollars. and pay capital gains taxes by selling the stock. estate taxes. for Mr. Lauder. wealthy wouldcost jobs. harm the economycost jobs. and cost jobs. cost jobs. An examination of publicAn examination documents of public documents An examination of public documents An examinationinvolving of Mr. public Lauder’s documentsinvolving companies, Mr. Lauder’s in- companies,Estée in- involving Lauder Mr. Lauder’s Heir’s companies, Fortune, in- Worth Billions, Is Artfully Sheltered involving vestments Mr. Lauder’s and companies, charitiesvestments in- offers and a charities offers a vestments and charities offers a vestmentsglimpse and of charities the wide glimpse offers array of ofa legal the wide op- array of legal op- Fromglimpse Page 1 of the wide array of legal op- tions for the world’s wealthiest citizens tions for the world’s wealthiest citizens glimpse oftions the for wide the array world’s of legalwealthiest op- citizens the tax burden onto small businesses tions for theto avoid world’s taxes wealthiest both atto homeavoidcitizens and taxes abroad. both at home and abroad.and the middle class.to avoid Republicans taxes have both at home and abroad. to avoid taxesHis both vast at home holdings and abroad.His — which vast holdings include — which resisted, include saying the Histax increases vast holdingson the — which include hundreds of millions in stock, onewealthy of the would harmhundreds the economy of millions and in stock, one of the His vasthundreds holdings of —millions which in include stock, one of the cost jobs. hundreds world’sof millions largest in stock, private world’sone of collections the largest private of collectionsAn examination of world’s of public largestdocuments private collections of world’s largestmedieval private armor, collections homesmedieval in Washington, of armor, homes in Washington,involving Mr. Lauder’smedieval companies, armor, in- homes in Washington, D.C., and on Park Avenue as vestments well as and D.C., charities and offers on Park a Avenue as well as medieval armor,D.C., and homes on Parkin Washington, Avenue as well as glimpse of the wide array of legal op- D.C., and oceanfront on Park Avenue mansions asoceanfront in well Palm as Beach mansions and in Palm Beachtions andfor the world’soceanfront wealthiest mansionscitizens in Palm Beach and oceanfrontthe mansions Hamptons in Palm — are Beachthe organized Hamptons and in a— lab- are organized into avoida lab- taxes boththe at homeHamptons and abroad. — are organized in a lab- yrinth of trusts, limited liability corpo-His vast holdingsyrinth — which of trusts, include limited liability corpo- the Hamptonsyrinth — ofare trusts, organized limited in a liability lab- corpo- hundreds of millions in stock, one of the yrinth of trusts,rations limitedand holding liability rationscompanies, corpo- and holdingsome of companies, world’ssome of largest rations private collections and holding of companies, some of rations andwhich holding his companies,lawyers acknowledgewhich some his of lawyers are in- acknowledgemedieval are in- armor, whichhomes in his Washington, lawyers acknowledge are in- tended for tax purposes. The cableD.C., tele- and on Parktended Avenue for as tax well purposes. as The cable tele- which his tendedlawyers for acknowledge tax purposes. are The in- cable tele- oceanfront mansions in Palm Beach and tended forvision tax purposes. network The he builtcablevision intele- network Central he Eu- built in Centralthe Hamptons Eu- —vision are organized network in a lab- he built in Central Eu- vision networkrope, CMEhe built Enterprises, in Centralrope, CMEmaintains Eu- Enterprises, an maintainsyrinth ofan trusts, rope, limited liabilityCME corpo-Enterprises, maintains an official headquarters in the tax havenrations andof holdingofficial companies, headquarters some of in the tax haven of rope, CMEofficial Enterprises, headquarters maintains in the antax haven of which his lawyers acknowledge are in- official headquartersBermuda, where in the ittax doesBermuda, haven not operateof where any it does not operatetended any for tax purposes.Bermuda, The cable where tele- it does not operate any Bermuda, stations.where it does not operatestations. any vision network hestations. built in Central Eu- And earlier this year, Mr. rope, Lauder CME Enterprises,And maintains earlier an this year, Mr. Lauder stations. And earlier this year, Mr. Lauder official headquarters in the tax haven of And earlierused his this stake year, in Mr. theused Lauder family his stake business, in the family business,Bermuda, where usedit does not his operate stake any in the family business, used his stakeEstée in Lauder the family Companies, Estée business, Lauder to create Companies, a to createstations. a Estée Lauder Companies, to create a tax shelter to avoid as much as $10And mil- earlier thistax year,shelter Mr. to Lauder avoid as much as $10 mil- Estée Laudertax shelter Companies, to avoid to as create much aas $10 mil- used his stake in the family business, tax shelterlion to avoidin federal as much income aslion $10 tax in mil- federalfor years. income In tax for years.Estée LauderIn Companies,lion in federal to create income a tax for years. In lion in federalJune, income regulatory tax forfilingsJune, years. show, regulatory In Mr. Lau- filings show, Mr.tax shelterLau- to avoidJune, as much regulatory as $10 mil- filings show, Mr. Lau- der entered into a sophisticatedlion in con- federal incomeder enteredtax for years. into In a sophisticated con- June, regulatoryder entered filings into show, a Mr. sophisticated Lau- con- June, regulatory filings show, Mr. Lau- der enteredtract into to sell a sophisticated$72 milliontract of to con-stock sell to$72 an million in- of stock toder an entered in- intotract a sophisticated to sell $72 con- million of stock to an in- BILL CUNNINGHAM/THE NEW YORK TIMES BILL CUNNINGHAM/THE NEW YORK TIMES tract to sell $72 million of stock to an in- BILL CUNNINGHAM/THE NEW YORK TIMES tract to sellvestment $72 million bank of stock in vestment 2014 to an at in- a bank price in of 2014 at a price of vestment bank in 2014 at a price of BILL CUNNINGHAM/THE NEW YORK TIMES about 75 percent of its current valuevestment in bank about in 2014 75 at apercent price of of its current value in THE COLLECTOR BILL CUNNINGHAM/THETHE NEW COLLECTOR YORK TIMES vestment about bank 75 in percent 2014 at of a its price current of value in about 75 percent of its current value in THE COLLECTOR THE COLLECTOR about 75 percentexchange of forits cashcurrent now.exchange value The transaction,in for cash now. The transaction,exchangeTo celebrate for cashexchange now. the The 10thtransaction, forTo cashcelebrateanniversary now. Thethe of transaction,10thTo his celebrate anniversaryNeue the Galerie, 10th anniversaryTHE of Ronaldhis COLLECTOR NeueTo of celebrateLauderhis Galerie, Neue Galerie, exhibited the Ronald 10thRonald works Lauderanniversary Lauder from exhibited exhibited his of workspersonalhis works Neue from his collection,fromGalerie, personal his Ronaldpersonalcollection, including Lauderincluding collection, Cézannes. exhibitedCézannes. including works Cé fromzannes. his personal collection, including Cézannes. exchange knownfor cash as now. a variableThe transaction,known prepaid as a forward, variable prepaidTo celebrate forward,known as the a variable 10thknown anniversary prepaid as forward,a variable of his prepaid Neue Galerie, forward, Ronald Lauder exhibited works from his personal collection, including Cézannes. minimizes potential losses forminimizes share- potentialminimizes losses for potential share- losses for share- known asminimizes a variable potential prepaid forward, losses for share- holders and gives them access to cash. ly $400 million of that stock is pledged to holds with more than $1 million in in- calling Mr. Lauder and his wife two of holders and gives them access to cash. holders and gives them access to cash. ly $400 million of that stock is pledged to holdsly $400 with million more of thanthat stock $1 million is pledged in in- to callingholds withMr. Lauder more than and $1his million wife two in of in- calling Mr. Lauder and his wife two of minimizesholders potential and lossesgives them for share- access to cash. But because the I.R.S. does not classify Butly Nobodymore $400 million than Pays That of$3.1 that billion, stock is the pledgedsecure evening various to lines holdswent of credit. withbeyond Many more fi- thancomeover $1 claimed spending million more in than in- cuts $27 billion callingand in an Mr.“the overhaul Laudernation’s pre-eminent and of histhe supporters wife tax two of of holders andBut gives because them the access I.R.S.But to does becausecash. not classifythe I.R.S. does not thisclassify as a sale, it ButallowsBut Nobodyinvestorsbecause like lythe Pays Mr.$400 I.R.S. million That securedoes of not that various classify stock lines is pledgedsecure But of credit. Nobody various tonancial Manyholds lines plannersPays fi- with of That considercome credit. more claimed it Many thanimprudent $1 fi- more millionsuchcome secure than deductions in claimed $27 in- various billion fromcalling more lines 2006 in thanMr. to of “the ’09, credit. Lauder $27 ac- nation’s billion the Many and arts pre-eminent inand his fi- civic wife“thecome causes.” two nation’s supporters claimed of pre-eminent more of than supporters $27 billion of in “the nation’s pre-eminent supporters of this as a sale, it allows investorsBut Nobody Lauderlike Mr. to Paysdefer payingthis That as taxes a sale, for years. it allows Articles investorssocial in this series andlike are Mr. cultural examiningnancial ef- significance. plannersfor principal consider shareholders As is it oftenimprudent in a company the cordingsuchcodenancial to deductionshave a reportplanners failed. this month fromconsider by 2006 Sena- it toimprudent ’09,Mr. ac-Lauder saidthesuch his arts life deductions and was changedcivic causes.” from 2006 to ’09, ac- the arts and civic causes.” But becausethis the as aI.R.S. sale, does it allows not classifyinvestors like Mr. It was a common tax reduction securestrat- forts variousnancial by businesses lines planners ofto lower credit. considertheir Manytaxes it fi- imprudentto borrowcome against claimed suchtheir stock. more deductions But than it re- $27 fromtor billion Tom 2006 Coburn in to of ’09, “theOklahoma, ac- nation’s whothe said pre-eminentarts and civic supporters causes.” of But Nobody Pays That Articles in this series are examining ef- Articles in this series are examining ef- 25 years ago when he visited a kin- this as a sale,Lauder it allows to defer investors payingLauder like taxes Mr. to for defer years. paying taxesArticles for in egyyears. this for series chief executives areLauder examining andto defer wealthynancial ef- paying andplannersfor taxesthecase debateprincipal for withconsider over years. how shareholders his to itimproveactivities, imprudentfor principal the in a mains justcompany shareholderssuch beneath a popular deductions cording way thein for a surface wealthycompany fromto a report tax- 2006 some tothiscordingfor ’09, wealthymonthprincipalA ac- tohandful taxpayers aby report theshareholdersSena- arts even ofthis and deductedbillionaires month Mr.civic in aLauder by causes.”companydergarten Sena- saidlike in Austria hisWarrencordingMr. life and Lauderwas metto changedE.a a report class-said his this life month was changed by Sena- Mr. Lauder said his life was changed Lauder to deferIt was paying a common taxes for taxIt years. reductionwas a commonArticles strat- tax in fortsreductionthis series by businessesshareholders strat-are examining ato fortsdecade lowerIt byef-was ago, their businesses buta common taxesinfor 2006 principal to taxlowertax tosystem. reductionwas borrow shareholderstheir a taxesshrewd against strat- in theiruseato companyforts borrow ofstock. by the businesses payersagainst ButUnitedcording it to re- gettheir to Scash tatestolower tor stock. aout report Tom of theirtax their But Coburn code. taxesthisholdings it re- month of mortgageOklahoma,torBuffett toby Tomborrow Sena- interest Coburnand whoagainst on Billtheirsaid Mr.of Oklahoma,yachts. theirLauderGates25 stock. years saidhave who Butroom his ago saidjoinedit life full re- when ofwas Jewish 25 Democratstorchanged heyears children Tom visited Coburn ago who a were when kin- of Oklahoma, he visited who a kin-said 25 years ago when he visited a kin- egy for chief executives and wealthythe I.R.S. said itand appearedegy the for debate to chiefbe an overabu- executives how to improve and wealthy the mainsand the a debate popularwithout over selling way how and for payingto wealthyimprove taxes. tax-the somemainsAnd there wealthy a is popularno limit taxpayers on the way amount for even of wealthy deductedrefugees tax- from dergarten Russia.some Still,wealthy he in said Austria taxpayers he and even met deducted a class- dergarten in Austria and met a class- It was aegy common for chief tax reduction executives strat- and wealthyforts by businessesand the debatesive to lower tax over shelter their how and taxes to issued improve tighterto the re-borrow mainsONLINE:against Previous a their popular articlesstock. way in But this for it wealthyre- Theretor tax- isTom a certain Coburnsome irony wealthy thatof Oklahoma, Mr. Lau- taxpayersproperty who evensaid taxes deducted that25 can years be deducted dergarten ago whenfound in he it Austria odd visited to be andreferred a kin- met to as a a class- phi- shareholders a decade ago, but in 2006 shareholders a decadeseries: ago,By butdonating in 2006 hispayers art to gethis cash private out of foundation,their holdings mortgageinpayers calling to interest get for cash an on outelimination their of yachts.their holdings of the breaks,roommortgage full say of interest Jewish- on children their yachts. who were room full of Jewish children who were egy for chiefshareholders executives a decade and wealthy ago, but inand 2006 the debatetax system. overstrictions how to to improve regulatetax system. the the practice.mains That a popularpayers to way get forcash wealthy outtax of system. their tax-der holdings hassome used wealthy $72mortgage million taxpayers worth interest of his even onfrom deducted their federal yachts. income.dergarten So Mr. Lauderroom in Austria is fulllanthropist. of and Jewish met children a class- who were shareholdersthe I.R.S.a decade said ago, it appeared butthe in I.R.S. 2006 to besaid an it abu- appeared to be rulingan abu- was enoughthe toI.R.S. persuade said payers most it appeared nytimes.com/businessdayto getMr. tocash beLauder outan abu-of theirhaswithout holdingsqualified sellingEstée formortgage Lauderand deductions paying shares interest to taxes. carry onworthout theirhis lat- yachts.entitledingwithoutAnd that to there deduct selling the is theroom nocurrent and$400,000 limit fullpaying on he of system pays the Jewish taxes. amount “I childrenadds did of what to Irefugeeswho wantedtheAnd werebudget to there do,” from he is said. Russia.no limit Still,on the he amount said he of refugees from Russia. Still, he said he tax system. wealthy taxpayers toONLINE: abandon thePrevious tech- articleswithout in sellingthis and payingONLINE: taxes.est state-of-the-artPrevious articles taxAnd reduction therein this tactic. is no limitannually on theon his amount Palm Beach of mansionrefugees as “What from I thought Russia. was Still, right.” he said he the I.R.S. said it appeared to besive an taxabu- shelter and issuedONLINE: tighter Previous re- sive articles tax in shelter thiswithout and selling issued and tighter paying re- taxes.There is a certain irony that Mr. Lau- propertyThere is taxes a refugeescertain that irony can from bethat Russia. deducted Mr. Lau- Still, hefoundproperty said it he odd taxes to be that referred can beto as deducted a phi- found it odd to be referred to as a phi- sive tax shelter and issued tighter re- nique, according toseries: tax lawyers and tensThere of is millions a certain ironyof dollarsseries: thatThese Mr. in Lau-contractsfederalAnd there emergedproperty income is no as limit a taxes populartax on- the thatwell amountdeficit, can as what be of contributes he deducted pays on his home foundto the on it wideningodd to be referred income to gap as a phi- strictions to regulateONLINE: the practice.Previousseries:records That articles at the Securities instrictions this and Exchangeto regulate the practice. That der has used $72 million worth of his fromder has federal used income. $72 million So Mr. worth Lauder of his is lanthropist.from federal income. So Mr. Lauder is lanthropist. sive tax shelterstrictions and to issuedregulate tighter the practice. re- That Theremillion isder a incertain hastaxes. used irony $72 that million Mr. Lau- worthtool aboutproperty of his a decade from taxes ago and federal that were devel- can income. bePark deducted So Avenue Mr. Lauder and found his holdings is it oddlanthropist. in theto be Areferred Passion tofor as Art a phi- Commission. es over the years, savings that help defray the between the richest and the rest of society, and strictions to regulate the practice.ruling That was enoughseries: to persuade most nytimes.com/businessdayruling was enough toEstée persuade Lauder Companies most wentEstéenytimes.com/businessday public Lauderoped shares by accountants to carry and out tax his planners lat- Hamptons.entitledEstée Lauder to deductlanthropist. shares the to$400,000 carry out he his pays lat- entitled“I did whatto deduct I wanted the $400,000to do,” he he said. pays “I did what I wanted to do,” he said. ruling was enough to persuade most nytimes.com/businessdayAdvisers to Mr. Lauder maintainder that has usedEstée $72 Lauder million shares worth to carry of his out hisfrom lat- federalentitled income. to deduct So Mr. the Lauder $400,000 is he pays “I did whatIn the IUnited wanted States, to Mr. do,” Lauder he said.has wealthy taxpayers to abandon the tech- wealthy taxpayers toin abandon 1995,hundreds and Ronaldthe tech- of Lauder millionsest and state-of-the-art his heafter has Congress spent tax closed reductioncreating down the tactic.loophole one est“This state-of-the-art welfare for the well-off tax — reduction cost- tactic. “What I thought was right.” “What I thought was right.” ruling waswealthy enough taxpayers to persuade to abandon most the tech- his deal “was made in complianceEstée with Lauder shares to carry out his lat- entitled to deduct the $400,000annuallyshifts he pays the on taxhis Palm “Iburden did Beach what“What onto mansionI wanted I smallthoughtfocused as to onbusinesses was do,” what annuallyright.” he callssaid. hisand on greatest his Palm Beach mansion as nytimes.com/businessday motherest cashedstate-of-the-art in hundreds oftax millions reductionon thetactic. Estée Lauderannually public on offering. his Palming Beachbillions ofmansion dollars a yearas — is being nique, according to tax lawyerspublished and I.R.S.nique, guidance according on these to tax lawyers and These contracts emerged as a popular wellThese as contracts what he pays emerged on his as homeapassion popular on — art. well as what he pays on his home on wealthy taxpayersnique, according to abandon to the tax tech- lawyers and est state-of-the-artof dollarsTheseof Newin stock contracts tax York but reduction managed emergedCity’s to side-tactic. cultural as aThe popular annually I.R.S.gems. began onwell crackinghis as Palm what down Beach he on paysmansionpaidthe for on middlewith hisas the home taxes “Whatclass. of on the I less thoughtRepublicans fortu- was right.” have resisted, types of transactions and was fully re- In 1976, at age 32, his generous dona- nique, according to tax lawyersrecords and at the Securities and Exchange records at the Securitiesstep paying and Exchange tens of millions tool in federal about thesea decade contracts ago in and 2008, were and hasdevel- pur- nate,Parktool many about Avenue who a aredecade and working his ago two holdings and jobs were in devel- the APark Passion Avenue for and Art his holdings in the A Passion for Art records at the Securities and Exchange ported as requiredmillion by S.E.C. in taxes.rules,”These said contractstool about The emerged a charitabledecade as ago amillion popular and deductions inwere taxes. welldevel- generated as whatPark he Avenue paysby Mr. on and his hissaying home holdings on the intax the increases ontions the helped wealthy him become would the youngest Commission. million in taxes. Commission. capital gains taxes by using a hedging sued a prominent case against the bil- just to make ends meet, and i.o.u.’sA toPassion be for Art records atCommission. the Securities and Exchange his spokesman, Gary Lewi. tool about a decade ago and wereoped devel- by accountantsPark Avenue and tax and planners his holdingsHamptons.oped in bythe accountants and tax plannerstrustee of the MetropolitanHamptons. Museum of million in taxes. Estée Lauder Companiestechniqueoped went knownby accountantspublic as shorting against andEstée tax Lauderlionaire planners Philip Companies Anschutz,Hamptons. wentwho used public one paid off by futureA generations,” Passion said for Art In the United States, Mr. Lauder has In the United States, Mr. Lauder has Advisers to Mr. Lauder Estéemaintain LauderIn theory,that Companies Mr. LauderAdvisers is wentscheduled to public Mr. to LauderLauder maintain — that whoseafter donations Congress closed have down aided the causesloophole harmafter“This Congress the welfare economy closedfor the down andwell-offIn costthe Art.—loopholeUnited jobs.cost- He later States, served“This Mr.as chairman Lauder welfare of thehas for the well-off — cost- Commission.Advisers to Mr. Lauder maintain that in 1995, and oped Ronald bythe Lauderaccountants afterbox. Congress and and his closed tax in planners down 1995, the to and loophole avoidHamptons. Ronald more than Lauder $140“This million welfare and in fed- his forSenator the well-off Coburn, a— Republican, cost- who has his deal “was madeEstée in Lauder compliancein 1995, Companies pay and with taxes Ronald on went thehis $72 Lauder publicdeal million “was when and made the his in compliance with eral taxes. Museum of Modernfocused Art and on remains what an he calls his greatest focused on what he calls his greatest Advisershis to deal Mr. Lauder“was made maintain in compliance that with mother cashedafter in hundredsCongressTogether,onas the variedclosed of Mr. millionsEstée Lauder down as Lauderand hospitals the hisonmother loopholemother the public and Estée cashed offering. efforts Lauder“This in hundreds towelfare publicrebuild offor offering. millions Jewthe well-off- calledingon — billions for theAncost- limits examination Estée of on dollars tax In Lauder breaks the a United for focusedyear of public high public — States, is offering.on being documents what Mr. Lauder he ing calls billions involvhas his greatest of- dollars a year — is being in 1995, andmother Ronald cashedshares Lauder are in actually hundreds and delivered his of millions in 2014. Whether or not ingthe I.R.S. billions agrees of with dollarsearners. a year — is being honorary chairman.passion He — has art. donated passion — art. published I.R.S. guidance on these published I.R.S. guidanceborrowed 13.8 on million these shares Theof compa- I.R.S. began cracking down on paidThe for I.R.S. with beganthefocused taxes cracking onofpassion the what less down—and he fortu-art. callslent on artwork his paid greatest to an for assortment with the of taxes of the less fortu- his deal “waspublished made in I.R.S. compliance guidance with on these But tax expertsof say dollars wealthy in taxpayers stockon the but EstéemanagedTheish LauderI.R.S.identity to side- began public in Eastern crackingof offering. dollars Mr. downEuropein stock Lauder’sing onbillions but — contention managedpaidare of dollars for just that with to his one aside- con-theyear taxes —ingMr. is of LauderbeingMr. the deductslessLauder’s fortu- property companies, taxes on investments and types of transactionsmother cashed andof dollars was in fully hundreds in stock re- but oftypes millionsmanaged of transactions to side- ny andstock from was relatives fully re- and sold them to museums. Part ofIn his 1976, collection at age of lav- 32, his generous dona- In 1976, at age 32, his generous dona- published types I.R.S. of transactionsguidance on and these was fully re- can use other accounting techniquesThe to I.R.S. began cracking these down contracts ontract is legitimate, in 2008, some and tax has policy pur- ex- allnate,these of his many holdings, contracts who passionhis spokesman are in 2008, working— art. said.In and 1976, two has at jobs pur-age 32, hisnate, generous many who dona- are working two jobs of dollars in stock but managedstep to payingside- tens of millionsthe these publicfacet during in contracts of federal thea offeringsophisticated in 2008, step at $26 payingand a has taxpaid tens pur- strategyfor of millionswithnate, the manyused intaxes federal who toof the are less working fortu- two jobs ishly decoratedtions ceremonial helped armor him is on become the youngest tions helped him become the youngest ported as required by S.E.C.step rules,” payingfurther said tens defer their of ported millions payment. as in required federal by S.E.C. rules,” said sued a prominentperts say the case deal against illustrates the how bil- the Mr.charitiessued Lauder a prominentdeclined offers toIn say 1976, a case howglimpse tionsat muchagainst age helped 32, of the his the him bil-generous wide become arraydona- the youngestof types of transactionsported as required and was by fullyS.E.C. re- rules,” said capital gains taxesthese by contractsshare. usingsued Selling a a inprominent hedgingborrow 2008,ed and shares case capital has in againstthis pur- gains thenate, taxes bil- many by using who a are hedging workingjust two to jobsmake ends meet, and i.o.u.’sdisplay to be at the Met,just in to a gallerymake namedends meet, and i.o.u.’s to be step payingcapital tens gains ofThe millions taxtaxes burden byin federalon using the nation’s a hedging su- wealthy take advantagejust to of themake system. ends meet,that reduced and i.o.u.’s his federal to be taxes, but said trustee of the Metropolitan Museum of trustee of the Metropolitan Museum of ported as required by S.E.C. rules,”his spokesman, said Gary Lewi. his spokesman, Garyway Lewi. ispreserve referred to asa a fortune shortlionaire position. that Philip Forbes Anschutz, magazine who used says one paidlegallionaire off options Philip by futuretions Anschutz,for helped the generations,”trustee world’s who him ofused becomefor thehim.wealthiest said one Metropolitan the youngestpaid citizens off Museum by future of generations,” said his spokesman, Gary Lewi. perelite has steadilytechnique declined knownin recentsued as a prominent shortinglionaire Philip against case againstAnschutz,technique the who bil- used“There’s knownjust one to real asmake truth paid shorting toends the off idea meet, byagainst that futuretheand i.o.u.’she generations,”did notto bereceive tax said benefits in some In theory, Mr.capital Lauder gainstechnique is scheduled taxes by known usingto as a hedging shortingIn theory, against Mr. LauderSince is the scheduled Lauders retained to their own trustee of the MetropolitanAs all art collectorsMuseumArt. He may, laterof Mr. Lauderserved as chairman of the Art. He later served as chairman of the his spokesman,In theory, Gary Lewi. Mr. Lauder is scheduled to decades, according to a sliver of datalionaire re- Philiptomakes avoid Anschutz, more him thanthewho toworld’s $140used avoid millionone more362ndtax codein than fed- wealthiest for $140 the 1 percent million person. is in different fed- yearsSenatortoto avoid avoid because Coburn, moretaxes of the than alternative aboth Republican, $140 atArt. mini- millionhome He wholater and in has fed-served abroad. Senatoras chairman Coburn, of the a Republican, who has technique the known box. as shortingthe against box. shares, the maneuver allowed the them box. to paid off bySenator future Coburn, generations,” a Republican, said who has is entitled to deductMuseum the full of market Modern val- Art and remains an Museum of Modern Art and remains an In theory, Mr. Lauder is scheduledpay taxes to on the $72 million whenleased the annually pay by the taxes I.R.S. on Theto the ef- avoid $72have more million a neutral than when position $140 the in million the eralstock, in taxes. not fed-from the tax code for the 99 percent,” mumcallederal tax taxes. and for other limits Art.limits. on He tax later Museum breaks served for of as highModern chairman Artcalled ofand the for remains limits an on tax breaks for high pay taxes on the $72 million whenthe the box. fective federal incomeTogether, tax rate Mr. for theLauder eralandFrom taxes. his motheroffshore havensTogether, to aMr.Senator tax-sheltering Lauder Coburn,called and his fora Republican, stock mother limits on tax who breaksHis has vast for holdings high — whichue of include artworks donated hundreds to museums. shares are actually deliveredTogether, in 2014. Mr. Laudershares and arehis mother actuallysubject delivered to price in swings. 2014. UnderWhether I.R.S. said or Victornot the Fleischer, I.R.S. a agreeslaw professor with at earners.Whether orMuseum not the I.R.S.ofhonorary Modern agrees Art chairman. with and remainshonoraryearners. He hasan chairman. donated He has donated honorary chairman. He has donated pay taxesshares on the are $72 actually million when delivered the in 2014. 400 wealthiest borrowed taxpayers, representing 13.8eral million taxes. sharesWhether of compa- or not theborrowed I.R.S. agreesthe 13.8 Universitycalled withmillion for of sharesearners. limits Colorado. onof “Any compa- tax tax- breaks for high (For years, Mr. Lauder availed himself But tax experts Together,say wealthyborrowed Mr. taxpayersLauder 13.8 andmillion hisBut sharesmother tax expertsof compa- sayrules wealthy deal at the time,taxpayersso audacious they avoidedMr. paying Lauder’sthat Congress contention later that enacted his con- CharityofMr. millions Lauder’s and Tax honoraryin Breaks contention stock, and chairman.one that lent of of hisartwork athe quirk He con- world’s inhas thetoand taxdonatedan lent code assortmentlargest that artwork allowed of to an assortment of and lent artwork to an assortment of shares areBut actually tax experts delivered say wealthy in 2014. taxpayers the top 0.000258ny percent, stock fell from from aboutrelativesWhetheras andmuchMr. or soldasnot Lauder’s $95 thethem million I.R.S. to contention in capitalagreesny gains stock with that frompayer hisearners. luckyrelatives con- enough and toMr. have sold Lauder appreciated them deducts to Mr.property Lauder taxes deducts on property taxes on Mr. Lauder deducts property taxes on can use other borrowedaccounting ny13.8 techniques stock million30 from percent shares torelatives in 1995 ofcan tocompa- and 18 use percent sold other themin 2008, accounting to techniques to donors to take amuseums. deduction for Part donating of his collection of lav- museums. Part of his collection of lav- But tax expertscan use say other wealthy accounting taxpayers techniques to the public duringMr. Lauder’s thetaxes offering a that law contention might at forbidding $26 otherwise a that havetract the histhe been public is con- tactic, legitimate,property during Mr. is usually somethe Lauder offering put tax to a policy haschoice: at $26 for ex-cash a allprivatetractA of week his is before legitimate,holdings,collections and the opening lenthis some spokesmanof artworkmuseums. at medieval taxthe policy to Partsaid. an ex-armor, assortment of hisall collectionhomes of his of holdings, in of lav- his spokesman said. ny stock fromthe publicrelativesthe most during and recent sold the data them offering available. to at $26 a tract is legitimate, some tax policyout and Mr.pay ex- someLauder alltax, of ordeducts holdhis holdings,the propertyprop- Neuehis taxes spokesman Galerie on last month, said. Mr. Lauder a portion of anishly artwork, decorated without actu- ceremonial armor is on ishly decorated ceremonial armor is on further defer their payment. further defer their payment.due had they sold their own shares.perts say the deal illustrates how the Mr.perts Lauder say the declinedmuseums. deal illustrates toishly sayPart howdecorated of ally how his much turning collection the ceremonial overMr. the of Lauder art. lav- armor That declined break, is on to say how much can use otherfurther accounting defer their techniques payment. to When Mr. Laudershare. ran Sellingunsuccessfullytract borrow is legitimate,edperts decades shares say in some the thisaggressively deal tax policy illustratesshare. ex- Selling takenerty how andall borrow theriskofadvantage his the vagariesedholdings,Mr. shares Lauder of theof his inmarket. tax declinedspokesman this appearedWashington, to saysaid. at how another much D.C., gala, 40and blocks on Park Avenue as well The tax burdenthe public on theshare. during nation’s Selling the offeringsu- borrow atedThe $26 shares tax a burden in this onSuch the transactions nation’s allowed su- wealthy investors take advantage of the system. wealthy take ishlyadvantage decorateddisplay of the ceremonial system. atknown the as Met, fractional armor display in adonation, is gallery on at thewas named elim- Met, in a gallery named display at the Met, in a gallery named further deferThe their tax payment. burden on the nation’s su- for the Republicanway nomination is referred forperts may- to as sayto a cash wealthy the short in deal their position. take shareholdingsillustrates advantage way howwithout of isthe referred Onlysystem.Mr. the truly to Lauder as rich a can short declined use derivatives position. to say south, howthat muchatreduced the New hisYork federal Public Library, taxes, but said that reduced his federal taxes, but said perelite has steadilyshare. Sellingdeclinedway borrow is in referredor recent of Newed shares York to asandperelite a inreleased short this has his position. taxsteadily re- declinedbreaks in thatrecent are useful only for the mostthat reduced affluent. his federalas oceanfront taxes, but said mansions ininated Palm in 2006.) Beach forThe him.tax and code alsothe allows for him. The taxperelite burden has on steadily the nation’s declined su- in recent Since the Lauderswealthy retainedpaying take taxes.advantage their But ownthe of Lauders’ the system.Since “There’s use of theto real Laudersget the truth best retainedtoof theboth ideaworlds their that — lots the own of tohe receive did“There’s not the receive Carnegierealdisplay truth tax Foundation’s at tobenefitsfor the him. idea Met, in that insome a the galleryhe nameddid not receive tax benefits in some way is referredSince the toturn as Lauders to a the short public, retained position.he reported their paying own 30 “There’s real truth to the ideacash that thatand the very reduced littlehe risk.” didhis notfederal receive taxes, taxMedal but benefits of saidPhilanthropy. in some artwork in officesAs to beall deducted art collectors as a may, Mr. Lauder As all art collectors may, Mr. Lauder perelite has steadily declineddecades, in recent according to a sliver of data re- decades, according tothe a techniquesliverThe of wasdata debate so re- aggressivetax over code that whether for the to 1 percentreduce istax different shel- yearsHamptonstax code because for for— the of him. are the 1 percent alternativeorganizedAs all is business differentart mini- collectorsin expense.a labyrinthyears may, becauseMr. ofLauder of the alternative mini- decades, according to a sliver of data re- percent in totalshares, federal, state the andmaneuver city“There’s allowedtax real code truth them for to the to idea 1 percentshares, that the is the differentWhile maneuverhe Mr.did Lauder’s not years allowedreceive stock because holdings themtax benefits in to of theThe in alternative some program honored mini- people who leased annuallySince by the the shares, Lauders I.R.S. the The retained maneuver ef- theirleased allowed own annually them to by Congress the I.R.S. enacted The a law ef- afterward that Unlike some is wealthy entitled collectors to deduct who the full market val- is entitled to deduct the full market val- decades, accordingleased annually to a sliver by of the data I.R.S. re- The ef- taxes on about $30 million in income in ters and preferencesfrom the for taxpublicly the code tradedrich for companies theis one 99 percent,” showof the some havemumtrusts,from given tax the limited profuselyand tax other codeAs toliability limits.all charities, for art is the entitledcollectors in-corporations 99 percent,” to may,deduct Mr. and themum Lauder full holding tax market and other val- limits. shares, the maneuver allowedhave them a neutral to tax position codelimited in forfrom the the the the stock, length 1 taxpercent ofnot code the tax is for have deferral. different the a 99neutral percent,”years position becausemum in the tax of stock, the and alternative othernot limits. mini- are criticized forue using of tax artworks breaks to un- donated to museums. ue of artworks donated to museums. fective federal income taxhave rate a neutral 1988. for At the the position time,fective his innet the worth federal stock, was esti- incomenot tax rate for the of his tactics, much of his wealth is hard- cluding Mr. Lauder’sis entitled brother Leonard ueto deduct of artworks the full donated market val- to museums. leased annuallyfective byfederal the incomeI.R.S. The tax ef- rate for the subject to pricefrom swings. theAnd tax the Under Lauders code foreventually I.R.S. the 99 paidsaid subject percent,” tens Victor of to Fleischer, price swings. a law professor Under I.R.S. at said Victor Fleischer, a law professorderwrite at private collections that offer have a neutralsubject position mated to price atin nearlythe swings. stock, a quarter not Under of a billion I.R.S. saidmost Victor volatile Fleischer, in aWashington law professorer to mumexamine atand tax because andwill itother ismove controlled limits. to by andcompanies, his wife, Evelyn some (who died of Nov. which 12), his lawyers(For acknowl years, Mr.- Lauder availed himself (For years, Mr. Lauder availed himself fective federal income tax rate400 for wealthiest the taxpayers, representing 400 wealthiest taxpayers,millions in representing stock from the transaction.the University of Colorado. “Any tax- the Universityue of of Colorado. artworks(For years, “Anydonatedlittle Mr.access tax- Lauder to to the museums. public, availed Mr. Lauder himself is 400 wealthiest taxpayers, representing dollars. rules at the time,said Victor they the avoided Fleischer, University paying a law of professor Colorado.rules at at the “Anya maze time, of tax- privately they held avoided trusts and paying com- whoseCharity causes andinclude Tax the Whitney Breaks Mu- Charity and Tax Breaks the top 0.000258subject percent, torules fell price from at swings. the about time, Under theythe avoided I.R.S.top 0.000258 paying percent,Still,the fellthe family’sfrompresidential about tax planning wascampaign, ef- now thatCharity repeated and Tax edge Breaks are intended(For years, for Mr. tax Lauder widelypurposes. praisedavailed offor Themaking ahimself quirk cable his inartwork the a tax code that allowed of a quirk in the tax code that allowed 400 wealthiestthe top taxpayers, 0.000258 percent, representing fell from about Mr. Lauder’s asmore much recent as tax $95returns million in capital gains payeras much lucky panies.as enough $95 Court million to documents, have in appreciatedcapital S.E.C. gains filings seumpayer and thelucky pink enough ribbon campaign to haveof a for quirkappreciated in the tax code that allowed rules at theas time,much theyas $95 avoided million paying in capitalthe gains Universityfectivepayer enough oflucky that Colorado. enoughafter Estée “Anyto Lauder have tax- appreciated community asset.donors to take a deduction for donating donors to take a deduction for donating 30 percent in 1995 to 18 percent remainin 2008, private, and30 hepercent declined into make1995 to 18 percent in 2008, and propertyCharity tax records and spotlightTax Breaks a few breastA cancer week awareness. beforeof a quirk the donors opening in the to tax attake code the a deduction that allowedA week for donating before the opening at the the top 0.00025830 percent percent, in 1995 fell tofrom 18 percentabout in 2008, taxes that mightpayer otherwise luckydied inattempts enough 2004, have she passed to been havein downCongress appreciatedproperty nearlytaxes $4 that to is usuallystrike might otherwiseputa grand to aA choice: week bargain have cash before been thetelevisionproperty opening is usuallynetwork at the put heto a builtchoice: Thein cash NeueCentral Galerie, Europe, created by Mr. as much astaxes $95 thatmillionthem might available in capital otherwise for this gains article. have been property is usually put to a choice:of the more cash ordinary tax breaks used by a portion of an artwork, without actu- a portion of an artwork, without actu- 30 percent in 1995 to 18 percentthe in most 2008, recent data available. the most recent databillion available. to her heirs, according outto tax and ex- pay some tax, or hold the prop- NeueoutRonald and Galerie Lauder pay andsome donors last his tax, wife,month, to a Joortake portion Car-hold Mr. a deduction theLauder Lauder of prop- an and artwork, Sergefor Neuedonating Sabarsky, without Galerie who died actu- last in month, Mr. Lauder the most recent data available. due had they soldproperty their ownisout usually andshares. pay put some to a choice: tax,due or had cashhold they affluentthe soldprop-A people. their week Neueown before shares. Galerie the opening last month, at the Mr. Lauder When Mr. Laudertaxes thatrandue unsuccessfully might had they otherwise sold their have Whenown been shares. Mr. Lauder perts ran whounsuccessfully studied the case and estimat- ole, were honored fora a portion variety of ofcontri- an artwork,1996, in a mansion withoutally once turning actu- owned by over Cor- the art. That break, ally turning over the art. That break, the most recentWhen data Mr. available. Lauder ran unsuccessfully The Family FortuneSuch transactions allowed investors ertySuch and risk transactionsSignificant theNeue vagaries Galerie portions allowed of ofthe last his investorsmarket. inheritedmonth, Mr.butions:appearederty Lauder and the work risk at of the another their vagaries joint gala,founda-ally of turning the 40 market. blocks over theappeared art. That at break, another gala, 40 blocks due had theySuch sold their transactions own shares. allowed investorsout anded pay thaterty some the and estate tax,risk was orthe taxedhold vagaries atthe an prop- ef-of the market. appeared at another gala, 40 blocks nelia Vanderbilt,known offers publicas fractional viewing donation, was elim- known as fractional donation, was elim- for the Republican nomination for may- for the Republican nomination for may- Only the trulystock arerich held can in family use trusts,derivatives which re- south,Only theat the truly Newally rich turningYork canknown Publicuse over derivatives as Library, the fractional art. That donation,south, break, at wasthe Newelim- York Public Library, When Mr.for Lauderthe Republican ran unsuccessfully nomination for may- Mr. Lauder, nowto cash 67, was in born their erty into shareholdings a andfective riskOnly rate the the of vagaries 16 without trulypercent rich —of about the canto market.a third cashuse derivatives in theirappeared shareholdings south, at another at withoutthe New gala, Yorktion 40 supportingblocks Public Library, hospitals, rebuilding of an exquisite collection, worth more Such transactionsto cash in their allowed shareholdings investors without duce the ultimate estate tax. Mr. Lauder inated in 2006.) The tax code also allows inated in 2006.) The tax code also allows for the Republican nominationor for of may-New York and released hisstoried tax re- Americanor fortune. of New His York mother, and ofreleased the top estate his tax tax rate re- at theto time. get the best of both worlds — lots of monumentstoto receiveget the and best therefurbishingknown Carnegieof both as American inatedfractionalworlds Foundation’s in —than 2006.) donation,lots $200 ofThe million taxwasto even code receiveelim- before also Mr. the allows Lau- Carnegie Foundation’s or of New York and released his tax re- paying taxes. Only But the truly Lauders’to get rich the usecanbest ofuse of bothderivativespaying worlds taxes. and— hislotssouth, Butwife of have theat the toalso Lauders’ receiveNewestablished York use the their Public of Carnegie Library, Foundation’s turn to the public,to cash he reported inpaying their paying shareholdings taxes.Estée Lauder, 30 But theturn without daughter Lauders’ to the of public, Eastern use of he reportedRonald Lauder paying has 30 not been a di- embassies around inated the world in —2006.) more Theder tax added code dozens alsoartwork of allows pieces in for offices its 10th to be deducted as a artwork in offices to be deducted as a or of Newturn York to and the releasedpublic, he his reported tax re- paying 30 the technique was so aggressive that cashthe and technique veryown tofamilylittle was receive trusts,risk.” so allowing aggressive the Carnegie them to that be- Foundation’sMedalcash and of Philanthropy. very little risk.”artwork in offices toMedal be deducted of Philanthropy. as a paying taxes.the technique ButEuropean the Lauders’ was immigrants, so use aggressive began of sellingto thatget therector cashbest of the andof company both very worlds sincelittle 2009, risk.” — but lots he of Medal of Philanthropy.than a quarter of a billion dollars over anniversary. business expense. business expense. percent in total federal, state and city percent in total federal, state and city queath their wealth to their heirs with artwork inbusiness offices expense. to be deducted as a turn to thepercent public, he in reported total federal, paying state 30 and city homemade beautyCongress creams at enacteda fewcash New aand lawstill very servesafterwardWhile little as Mr. therisk.” that presidentLauder’s ofCongress While itsstock Cli- Mr.holdings enacted Lauder’sMedal in a of law stockPhilanthropy. Theafterward holdings program that in honoredthe The lastWhile five programpeople Mr. years, Lauder’s who according honored stock to his people holdingsSheldon who in Cohen, aThe former program I.R.S. com- honored people who taxes on aboutthe $30 technique millionCongress in wasincome enacted so aggressivein a lawtaxes afterward that on about that$30 million in income in minimal taxes. spokesman. Unlike some wealthy collectors who Unlike some wealthy collectors who percent intaxes total on federal, about state$30 million and city in income in York City hair limited salons in the the 1940s length and ofnique the Laboratories tax deferral. subdivision.publiclylimited He also traded the length companies of the taxshow deferral. some havepublicly given traded profuselybusiness companies expense. to Unlike charities, showmissioner, some some in- wealthy said thathave when collectors given used profusely as who in- to charities, in- Congress limitedenacted thea law length afterward of the that tax deferral.Whilesublets Mr.publicly Lauder’s a full floor traded ofstock office companies holdings space from in showOther someThe trusts programandhave partnerships given honored control profusely peopleThe to Ronald who charities, S. Lauder in-Foundation has are criticized for using tax breaks to un- are criticized for using tax breaks to un- taxes on about1988. At$30 the million time, inhis 1988.income net worthAt thein was time, esti- his net worth wasbuilt esti-her productAnd 1988.line intothe At aLauders themultibillion- time, eventually his net worth paid was tens esti- of ofAnd his thetactics, Lauders much eventually of his wealth paid is tenshard- of cludingof his tactics, Mr. Lauder’s muchUnlike of hisbrother someare wealth criticized wealthy Leonardtended, is hard- for the collectors usingtax code’scluding tax breaks who breaks Mr. for art Lauder’sto col- un- brother Leonard limited theAnd length the dollarLauders of theglobal taxeventually empire. deferral. paid tenspublicly of Estée tradedof Lauder,his tactics, companies on the much 42nd story show of his of somethewealthhis isrealhave hard- estate given propertiescluding profusely in Palm Mr. Beach Lauder’s to charities,donated brother tens in- of millions Leonard of dollars to re- lectors balancederwrite private interests private with collections that offer derwrite private collections that offer 1988. At the time, his net worthmated was esti- at nearly a quarter of a billion mated at nearly a quarter of a billion er to examineand the because Hamptons it isand controlled at 740 Park Ave- by ander to his examine wife, Evelynare because criticized (who itderwrite is died forcontrolled usingNov. private 12),tax by breaks collectionsand to his un- wife, that Evelyn offer (who died Nov. 12), mated at nearly a quarter of a And billion the Lauders eventuallyAs the son paid ofmillions a tens fabulously ofin stock wealthyof hisfrom tactics,General theer transaction. to much Motors examine ofBuilding his because wealth in Manhattan,millions isit hard-is controlled in stockcluding byfrom Mr.theand transaction. Lauder’s his wife, brotherEvelynbuild (who Leonard Jewish died communities Nov. 12), devastated the public good.little access to the public, Mr. Lauder is little access to the public, Mr. Lauder is dollars. millions in stock fromdollars. the transaction. which serves as the hub for thea maze matrix of privatelynue, a building held that trusts was once and home com- to bya themaze Holocaust of privately andderwrite communist held privatelittle trusts rule. access and collections com-to the public, that offer Mr. Lauder is mated at dollars. nearly a quarter of a billion millions in stock fromfashion the icon,transaction. Mr.Still, Lauder the developedfamily’ser to examine tax planninga maze because of was privately it ef- is controlled heldStill, trusts by the and family’sand com- his tax wife,whose planning Evelyn causes was (who ef-include diedwhose Nov. the 12),Whitneycauses include Mu- the Whitney“If Mu- an art collectorwhose makes causes significant include the Whitney Mu- Mr. Lauder’s more recentStill, tax the aristocraticreturns family’s tastes tax — Mr.planning and Lauder’s grand wasaspira- more ef- of recent foundations, tax investmentreturns funds, part- John D. Rockefeller, and is known as Mr. Lauder has alsolittle given accessto a varietywidely to of the praised contributions,public, for Mr. making andwidelyLauder the his publicpraised is artwork actually for makinga his artwork a widely praised for making his artwork a dollars. Mr. Lauder’s more recent tax returns fective enougha mazethat after nershipsof privatelypanies. Estée and trusts CourtLauder held used trusts documents, to controlpanies. andfective com-his S.E.C. Courtenoughone of whose filings documents, the that world’s causesafter seumwealthiest S.E.C.Estée include and apartment Lauder filingsthe the pink Whitney Jewishribbonseumpanies. andandMu- campaign Court Israelithe pink documents, organizations, for ribbon campaign in- S.E.C. filings for seum and the pink ribbon campaign for remain private, andStill, he the declinedfective family’s enough totions tax make — planning at that an early afterremain was age. Estée Heef- private, summered Lauder and he declined to make widely praisedcommunity for getsmaking asset.access his to the communityartwork works they a are asset. donat- community asset. Mr. Lauder’sremain more private, recent and tax he returns declined to make died in 2004, shepanies. passed businesses Court down documents, and nearly personal $4 finances. S.E.C.anddied filingsproperty in 2004,buildings. taxseumshe records passed and the spotlightdown pink nearly ribbon a few $4 campaigncludingbreastand property the cancerfor World awareness. tax Jewish records Congress, spotlighting, a then few the majorbreast thing cancer the collector awareness. them availablefective for this enough article.died in that 2004,in Viennaafter she asEstée passed a boy,them developingLauder down available nearly a passion for $4 this article.and property tax records spotlight a few breast cancer awareness. The Neue Galerie, created by Mr. The Neue Galerie, created by Mr. remain private,them availableand he declined for this to article. make for Austrian artbillion and medieval to her armor. heirs, At accordingHis stake to in tax Estée ex- Lauderof billion Compa-the more to her ordinaryUnited heirs, States accordingtax tax breaks law allows to used tax taxpay- byex- whereofRonald the he hasmore served Lauder ordinarycommunity as president and tax his sinceasset.breaks The wife, Neue gets Joused Car-is prestige Galerie,by and Ronald createdsocial status,” Lauder by said Mr. and his wife, Jo Car- died in 2004,billion she topassed her heirs, down according nearly $4 to taxand ex- propertynies,of according the tax more records to regulatoryordinary spotlight filings,tax abreaks isfewers used tobreast deduct by mortgagecancerRonald awareness.interest Lauderon one’s and2007. hisRichard wife, Parsons, Jo Car- the former Time Lauder and Serge Sabarsky, who died in Lauder and Serge Sabarsky, who died in them available for this article. age 13, he boughtperts his firstwho Schiele studied with the case and estimat- affluentperts who people. studied the case and estimat- ole,affluent were people.honoredThe for Neuea varietyLauder Galerie, of andMr. contri- Cohen, Serge created now Sabarsky, aole, lawyer by were Mr. in who Washington. honored died in for a variety of contri- billion to herperts heirs, whomoney according studied from histhe to bar case tax mitzvah. ex-and Mr.estimat-of Lau- the morevaluedaffluent ordinary at more people. than tax $600 breaks million. used Near- byhomes upRonald to $1.1 million ole, Lauder were in debt. and honored House- his wife, forWarner a Jovariety chairman, Car- of contri-presented the award, At times, Mr.1996, Lauder’s in a efforts mansion to en- once owned by Cor- 1996, in a mansion once owned by Cor- The Family Fortune The Family Fortune Significant portions of his inherited butions:Significant the workLauder portions of theirand 1996, of Serge joint his in inheritedaSabarsky,founda- mansion who oncebutions: died owned in the by work Cor- of their joint founda- The Family Fortune perts whoed studied that der thethe grew case estate so and enthralled wased estimat- that taxed by the politics at estate affluent an as aef- was people. taxedSignificant at an ef- portionsed of that his the inherited estateole, were was honoredbutions: taxed atforthe ana workvariety ef- of oftheir contri- joint founda- hance his art collectionnelia Vanderbilt, have coincided offers public viewing nelia Vanderbilt, offers public viewing young man that he told friends he stock are held in family trusts, which re- stock are held1996, in family in a neliamansion trusts, Vanderbilt, whichwith once tax re- avoidanceowned offers by techniques. publicCor- viewing The Family Fortune ed that the estate was taxedfective at an rate ef- of 16 Significantpercentstock — about portions are aheld third ofin hisfamily inheritedfective trusts, rate which ofbutions: 16 re-percent thetion — work about supporting of a their third joint hospitals,tion founda- supporting rebuilding hospitals, rebuilding oftion an exquisite supporting collection, hospitals, worth rebuilding more of an exquisite collection, worth more Mr. Lauder, now 67,Mr. was Lauder, born into now a 67, wasfective born ratedreamed into of 16 a of percent becomingMr. — the about Lauder, first Jewisha third now 67, was born into a nelia Vanderbilt,of an exquisite offersIn 2006, public three collection, months viewing after worth he agreed more of the top estatestock tax arerate heldduce at the in the time.family ultimate trusts, estateduce whichof the tax. the topre- Mr.ultimate estate Laudertion tax estate supporting rate tax. at the Mr. time. hospitals,Lauder rebuildingmonumentsduce the ultimate and refurbishing estate tax. Mr.American Lauder monuments and refurbishing American Mr. Lauder,storied now American 67, was born fortune.storied into HisAmerican a mother,fective fortune. rateof of the His16 top percent president mother, estate — of tax aboutthe rateUnitedstoried a at third States. the American time. fortune. His mother, monuments and refurbishing Americanof an exquisitethan $200 collection,to paymillion $135 million, wortheventhan a before record more$200 at millionMr. the time,Lau- even before Mr. Lau- than $200 million even before Mr. Lau- After studying inRonald Brussels Lauderand duceParis the has ultimateand not his been estatewife a have di- tax. alsoMr.and LauderestablishedRonald his wife Lauder havemonuments their also has established not and been refurbishing their a di- embassiesAmericanand his wife around have also the established world —for more thetheir Klimt paintingembassies “Adele around Bloch- the world — more storied AmericanEstée Lauder, fortune. the His daughterEstée mother, Lauder, of Easternof the the daughter top estateRonald of tax Eastern rate Lauder at the has time.Estée not Lauder, been a the di- daughter of Eastern embassies around the world — than more $200 dermillion added even dozens before ofder Mr. pieces added Lau- for dozens its 10th of pieces for its 10th der added dozens of pieces for its 10th Ronald Lauder and has at the not Wharton beenrector School a of di- the at thecompanyand Uni- his wife sinceown have 2009,family also but trusts, establishedhe allowingownrector familytheir of them the trusts, companyembassiesto be- allowing sincethan around them a2009, quarter theto but be- worldhe of a than billionown — more afamily quarter dollars trusts, over of a allowing billion dollars themBauer to over I,”be- Mr. Lauderanniversary.than sold a a quarter $190 million of a billion dollars over anniversary. Estée Lauder,European the daughter immigrants, ofEuropean Eastern began immigrants, selling rector began of versity the selling company of Pennsylvania,European since he2009, joined immigrants, but the he began selling der addedanniversary. dozens stake of pieces in his broadcast for its network 10th CME. still serves asown the family presidentqueath trusts, of their allowing its Cli- wealth themqueath still to theirto serves be- their heirs aswealththan with the a president to quarter their heirs of of a its billion with Cli- dollarsthequeath last over their five wealth years, to according their heirs to with his the last five years, according to his European homemade immigrants, beauty began creamshomemade selling at a fewbeautyrector New creams of thestill companyat serves a fewfamily New assince business the 2009, president inhomemade 1964 but and he served of beauty its in Cli- a creams at a few New the last five years, according toanniversary. his SheldonWhen Cohen, asked a about formerSheldon the sale, I.R.S. Cohen, Mr. Lau- com- a former I.R.S. com- Sheldon Cohen, a former I.R.S. com- variety of limitednique roles. Laboratories While hisqueath older subdivision. theirminimal wealth Hetaxes. to also their heirsminimalnique with Laboratories taxes.the last subdivision. five years, He accordingalso spokesman.minimal to his taxes. der’s spokesmanspokesman. said the proceeds homemadeYork beauty City creams hair salons at aYork few in New City the 1940s hairstill salons and serves innique the as the 1940sLaboratories president and subdivision. ofYork its CityCli- hairHe also salons in the 1940s and spokesman. Sheldonmissioner, Cohen, a former said that I.R.S.missioner, when com- used said as that in- when used as in- missioner, said that when used as in- nique Laboratoriesbrother subdivision. Leonardsublets rose He toalso become a full minimal floorEstée of officetaxes.Other space trusts from and partnershipssubletsOther trusts a full controlspokesman. and floor partnerships of office space control from TheOther Ronald trusts S. andLauder partnerships Foundationwere control hastaxable intended, the TheUnited Ronaldthe States tax at S.code’s the Lauder breaks Foundation for art col- has tended, the tax code’s breaks for art col- York City built hair her salons product in the line built 1940s into her a and multibillion- product line intosublets a multibillion- aLauder’s full floor chief of executive,built office her space Ronaldproduct from en- line into a multibillion- The Ronald S. Lauder Foundationmissioner, has tended, said that thefull tax when capital code’s used gains breaks as rate. in- Evenfor art then, col- Estée Lauder, onOther the 42ndtrusts story and partnershipsof the hisEstée controlreal Lauder,estate properties onThe the Ronald 42nd in PalmS. story Lauder Beach of the Foundationdonatedhis real has tensestate of propertiesmillions of indollars Palm toBeach re- donated tens of millions of dollars to re- built her productdollar global line into empire. a multibillion-dollar global empire.sublets a Estée full floor Lauder,gaged of office in on a variety the spacedollar 42nd of pursuits:from globalstory becom- empire.of the his real estate properties in Palm Beach donated tens of millions of dollarstended, to re- thelectors tax code’s balancethough, breaks CME’s private forlectors complexart interests col- balance corporate with private interests with lectors balance private interests with ing a major RepublicanGeneral Motors fund-raiser;his Building real estate in Manhattan,properties in PalmandGeneral Beachthe Hamptons Motorsdonated Building and tens at 740in of Manhattan,Parkmillions Ave- of dollarsbuildand tothe Jewish re- Hamptons communities and at 740 devastated Parkstructure Ave- — it operatesbuild Jewishin Central communities Eu- devastated dollar globalAs empire. the son of a fabulouslyAs the son wealthy Estée of a fabulouslyLauder,General on wealthytheMotors 42nd Building storyAs of inthe Manhattan, son of a fabulouslyand the Hamptons wealthy and at 740 Park Ave- build Jewish communities devastatedlectors balancethe public private good. intereststhe public with good. the public good. General Motors Buildingserving a in rocky Manhattan,which tenure serves as ambassador andas the the hub Hamptonsnue, for athe building andmatrix at 740 that nue,Park which was a Ave- once buildingserves homebuild as that the to Jewish washub oncefor communities the home matrix to devastatedbynue, the a Holocaust building that and was communist once rope, home rule. is to organizedby“If asthe an a Holocaustart Netherlands collector and makes communist significant rule. “If an art collector makes significant As the fashion son of a icon, fabulously Mr. fashion Lauder wealthy icon, developed Mr. Lauderwhich developedservesto Austria; as the running fashionhub for for mayor, the icon, anmatrix un- Mr. Lauder developed by the Holocaust and communistthe rule. public good.“If an holdingart collector company, makes keeps its significant headquar- of foundations,nue, investment a building funds, that part-was onceJohn of home foundations, D. to Rockefeller, investment and is funds, known part- as Mr.John Lauder D. Rockefeller, has also given and to isa variety known of as Mr. Lauder has also given to a variety of fashion icon,aristocratic Mr. Lauder tastes — developedaristocratic and grand tastes aspira-which — serves andof grand foundations, as thesuccessful aspira- hub for investmentbid inthe whicharistocratic matrix he spent funds, $363tastes part- for — andJohn grand D. Rockefeller,aspira- and is knownby the as HolocaustMr. Lauder and has communist also given rule. to a variety“If of an artcontributions, collectorters makes in Bermuda and significantcontributions, the and public routed actuallythe and $190 the public actually contributions, and the public actually each vote he received;nerships and andstarting Johntrusts an D.used Rockefeller, to control andhis is one knownnerships of the as world’sand trusts wealthiest used to apartment control his Jewishone of the and world’s Israeli wealthiest organizations, apartmentmillion in-sale throughJewish two Cayman and Island Israeli organizations, in- aristocratictions tastes — at— anand early grand tionsage. aspira- He— at summered an ofearly foundations, age.nerships He summered investment and trusts funds, usedtions part- to— controlat an early his age.one He of summeredthe world’s wealthiest apartmentMr. LauderJewish has also and given Israeli to a variety organizations, of contributions, in- gets access and the to the public worksgets actually accessthey are to donat- the works they are donat- gets access to the works they are donat- nerships and trustsassortment used to of control businesses business his ventures andone personal in of the buildings. world’sfinances. wealthiest apartmentbuildings.businesses andJewish personal and finances. Israeli organizations,cludingbuildings. in- the World Jewish Congress,companies — ing, allowedcluding then Mr. the Lauder major World to thing Jewish the Congress, collector ing, then the major thing the collector tions — atin an Vienna early asage. a boy, He developingsummeredin Vienna as a passiona boy, developingbusinesses a Easternpassion and Europe,personalin one Vienna finances. of which as a went boy, developing a passion cluding the World Jewish Congress,gets accessing, to the then worksminimize the majorthey taxes are in thing countries donat- the outside collector the His stake inbuildings. Estée Lauder Compa- UnitedHis stake States in tax Estée law Lauderallows taxpay- Compa- whereUnited he has States served tax aslaw president allows taxpay- since where he has served as president since in Vienna foras aAustrian boy, developing art andfor medievala passion Austrian armor. artbusinesses and At medieval andHis personal armor. stakebankrupt inAt finances. during Estée forthe LaudertechnologyAustrian Compa-bubble. art and medievalUnited armor. States At tax law allows taxpay-cluding thewhere World he has Jewish served Congress, as presidenting, since then gets the majoris prestigeUnited thing States and the wheregets social collector it is does prestigestatus,” business. saidand social status,” said gets is prestige and social status,” said While the family’snies, wealth according was created United to regulatory States filings,tax law isallowsersnies, taxpay- to deduct according mortgage to regulatory interest filings,on one’s is 2007.ers to Richard deduct Parsons,mortgage the interest former onSome Time one’s tax reform2007. advocates Richard say that Parsons, it the former Time for Austrianage art 13, and he medievalbought hisage armor. first 13, SchieleheAt bought withHis his stake firstnies, inSchiele according Estée with Lauder to regulatoryage Compa- 13, he filings, bought is his firsters to Schiele deduct with mortgage interest onwhere one’s he 2007.has served Richard as Parsons,president the since formergets Time is prestigeMr. Cohen, and socialnow a status,”lawyerMr. Cohen, in said Washington. now a lawyer in Washington. Mr. Cohen, now a lawyer in Washington. nies, according toby regulatory hard work andvalued filings, ingenuity, at is more it wasers bol-than to deduct $600 million. mortgage Near- interesthomesvalued on one’s up at tomore $1.12007. thanmillion Richard $600 in million.debt. Parsons, House- Near- the formerWarnerhomes Time chairman,up to $1.1 million presented in debt. theis award, House- unfair that theWarnerAt wealthiest times, chairman, can Mr. sub- Lauder’s presented efforts the toaward, en- At times, Mr. Lauder’s efforts to en- age 13, hemoney bought from his first his barSchielemoney mitzvah. with from Mr. his Lau- bar mitzvah.valued Mr.atstered more Lau- by than aggressive money$600 taxmillion. from planning, Near- his a bar mitzvah.homes up Mr. to Lau-$1.1 million in debt. House- Warner chairman, presented the award,Mr. Cohen, nowAt times,a lawyersidize Mr. their in Lauder’s Washington. lifestyles using efforts myriad to off- en- money fromder his grew bar so mitzvah. enthralledder Mr. grew by Lau- politics so enthralledvalued as a at more by politics thanskill $600 as that a hasmillion. becomeder Near- grew Ronald so Lauder’s homes enthralled up to by $1.1 politics million as in a debt. House- Warner chairman, presented the award, At times,hance Mr. Lauder’shisshore art maneuvers collection effortshance and tohave complex his en- artcoincided account- collection have coincided hance his art collection have coincided specialty. When Mr. Lauder’s father, Jo- ing strategies. der grew young so enthralled man that by politics heyoung told as man afriends that he he told friends he young man that he told friends he hance his withart collection tax avoidance have techniques. withcoincided tax avoidance techniques. with tax avoidance techniques. seph, died in 1983, family members “It’s admirableIn when 2006, people three back months after he agreed In 2006, three months after he agreed young mandreamed that he of becoming told friendsdreamed the he first of becoming Jewish the first fought Jewish the I.R.S. fordreamed more than of a decade becoming the first Jewish with tax avoidanceIn 2006,their techniques. three charitable months impulses after up hewith agreed dona- dreamed president of becoming of the the United firstpresident JewishStates. of the United States. to reduce their estatepresident tax. The of disputethe United States. In 2006, tothree pay months$135tions,” million, said after Scott atohe record Klinger,pay agreed $135 taxat thepolicymillion, time, di- a record at the time, to pay $135 million, a record at the time, involved a block of shares bequeathed rector of the group Business for Shared president of Afterthe United studying States. in BrusselsAfter studying and Paris in Brussels and Paris After studying in Brussels and Paris to pay $135for million, the Klimt a record painting atfor the the time, “Adele Klimt Bloch- painting “Adele Bloch- for the Klimt painting “Adele Bloch- and at the Wharton School at theto the Uni- family — and the estate at the valued Wharton it at School at the Uni- Prosperity. “ButBauer the tax I,” code Mr. shouldn’t Lauder sold a $190 million Bauer I,” Mr. Lauder sold a $190 million After studyingand at thein Brussels Wharton and School Paris at the Uni- $29 million, while the I.R.S. placed it at JOHN VAN BEEKUM FOR forTHE NEW the YORK TIMES KlimtBauer painting I,”allow Mr. the Lauder “Adelewealthy sold the Bloch- kind a $190 of loopholes million and at theversity Wharton of Pennsylvania, School atversity the Uni- he of joined Pennsylvania, the he joined$89.5 themillion. A versity panel of of judges Pennsylvania, ulti- he joined the Bauer I,” Mr.stake Lauder in histhat broadcastsold let them, a $190 stake essentially, network million in his force CME. broadcast other network CME. stake in his broadcast network CME. family business in 1964 and servedmately in decideda onfamily $50 million, business a deci- in 1964 and served in a A TAX BEGETS A TAX BREAK taxpayers to underwriteWhen donationsasked about to the sale, Mr. Lau- When asked about the sale, Mr. Lau- versity of family Pennsylvania, business hein 1964 joined and the served in a sion that saved the estate more than $20 Mr. Lauder pays $400,000 in property taxes annually on his Palm Beach mansion.stake in his broadcastWhen theirasked networkpet causes.”about CME. the sale, Mr. Lau- family businessvariety in of 1964 limited and roles.servedvariety While in of a limitedhis older roles. While his older variety of limited roles. While his older When askedder’s about spokesman the sale, der’s said Mr. Lau- the spokesman proceeds said the proceeds der’s spokesman said the proceeds variety of brotherlimited roles. Leonard While rosebrother his to older become Leonard Estée rose to become Estée brother Leonard rose to become Estée der’s spokesmanwere taxable said in the wereUnited proceeds taxable States in at the the United States at the were taxable in the United States at the brother LeonardLauder’s rose chief to become executive,Lauder’s Estée Ronald chief executive, en- Ronald en- Lauder’s chief executive, Ronald en- were taxablefull in capital the United gains States full rate. at capital the Even gains then, rate. Even then, full capital gains rate. Even then, Lauder’s gaged chief executive, in a variety Ronald gaged of pursuits: inen- a variety becom- of pursuits: becom- gaged in a variety of pursuits: becom- full capitalthough, gains CME’s rate. Even complexthough, then, CME’s corporate complex corporate though, CME’s complex corporate gaged in aing variety a major of pursuits: Republicaning becom- a major fund-raiser; Republican fund-raiser; ing a major Republican fund-raiser; though, structure CME’s complex — it operates structure corporate in Central — it operates Eu- in Central Eu- structure — it operates in Central Eu- ing a majorserving Republican a rocky tenure fund-raiser;serving as ambassador a rocky tenure as ambassador serving a rocky tenure as ambassador structure rope, — it operates is organized in Central rope, as a isEu- Netherlands organized as a Netherlands rope, is organized as a Netherlands serving a to rocky Austria; tenure running as ambassadorto for Austria; mayor, running an un- for mayor, an un- to Austria; running for mayor, an un- rope, is organizedholding company, as a Netherlands keepsholding its company, headquar- keeps its headquar- holding company, keeps its headquar- to Austria;successful running bid for in mayor, whichsuccessful anhe spent un- bid $363 in which for he spent $363 for successful bid in which he spent $363 for holding company,ters in Bermuda keeps its and headquar-ters routed in Bermuda the $190 and routed the $190 ters in Bermuda and routed the $190 successfuleach bid in vote which he hereceived; spenteach $363 and vote for starting he received; an and starting an each vote he received; and starting an ters in Bermudamillion sale and through routedmillion two the Cayman $190 sale through Island two Cayman Island million sale through two Cayman Island each vote assortmenthe received; of and business startingassortment venturesan of business in ventures in assortment of business ventures in million salecompanies through two — Cayman allowedcompanies Island Mr. Lauder — allowed to Mr. Lauder to companies — allowed Mr. Lauder to assortmentEastern of business Europe, ventures oneEastern of which in Europe, went one of which went Eastern Europe, one of which went companiesminimize — allowed taxes Mr. in countries Lauderminimize tooutside taxes in the countries outside the minimize taxes in countries outside the Eastern Europe,bankrupt one during of the whichbankrupt technology went during bubble. the technology bubble. bankrupt during the technology bubble. minimize Unitedtaxes in States countries where outsideUnited it does theStates business. where it does business. United States where it does business. bankrupt duringWhile the the technology family’s wealth Whilebubble. wasthe family’screated wealth was created While the family’s wealth was created United StatesSome where tax it reform does business. advocatesSome tax say reform that it advocates say that it Some tax reform advocates say that it While theby family’s hard work wealth and was ingenuity,by createdhard work it was and bol- ingenuity, it was bol- by hard work and ingenuity, it was bol- Some taxis reform unfair advocates that the wealthiestissay unfair that it that can the sub- wealthiest can sub- is unfair that the wealthiest can sub- by hard workstered and by ingenuity, aggressive itstered was tax bol- by planning, aggressive a tax planning, a stered by aggressive tax planning, a is unfair sidize that the their wealthiest lifestylessidize can using sub- their myriad lifestyles off- using myriad off- sidize their lifestyles using myriad off- stered byskill aggressive that has tax become planning,skill Ronald that a has Lauder’s become Ronald Lauder’s skill that has become Ronald Lauder’s sidize theirshore lifestyles maneuvers using and myriadshore complex maneuvers off- account- and complex account- shore maneuvers and complex account- skill that hasspecialty. become When Ronald Mr.specialty. Lauder’s Lauder’s Whenfather, Mr. Jo- Lauder’s father, Jo- specialty. When Mr. Lauder’s father, Jo- shore maneuversing strategies. and complexing account- strategies. ing strategies. specialty. Whenseph, Mr. died Lauder’s in 1983, seph,father, family diedJo- members in 1983, family members seph, died in 1983, family members ing strategies.“It’s admirable when“It’s people admirable back when people back “It’s admirable when people back seph, diedfought in 1983, the I.R.S. family for foughtmore members than the I.R.S.a decade for more than a decade fought the I.R.S. for more than a decade “It’s admirabletheir charitable when impulses peopletheir backcharitableup with dona- impulses up with dona- their charitable impulses up with dona- fought theto I.R.S. reduce for more their than estateto a reducedecade tax. The their dispute estate tax. The dispute to reduce their estate tax. The dispute their charitabletions,” impulsessaid Scott up Klinger, withtions,” dona- taxsaid policy Scott di-Klinger, tax policy di- tions,” said Scott Klinger, tax policy di- to reduce involved their estate a block tax. Theof involved shares dispute bequeathed a block of shares bequeathed involved a block of shares bequeathed tions,” saidrector Scott of Klinger, the group tax Businessrector policy of di- thefor Sharedgroup Business for Shared rector of the group Business for Shared involved ato block the family of shares — the bequeathedto estate the family valued — it the at estate valued it at to the family — the estate valued it at rector of theProsperity. group Business “But the forProsperity. tax Shared code shouldn’t “But the tax code shouldn’t Prosperity. “But the tax code shouldn’t $29 million, while the I.R.S. placed it at $29 million, while the I.R.S. placed it at JOHN VAN BEEKUM FOR THE NEW YORK TIMES allowJOHN the VAN wealthy BEEKUM FOR the THE kind NEW YORK of loopholes TIMES allow the wealthy the kind of loopholes to the family$29 million, — the estate while valuedthe I.R.S. it atplaced it at JOHN VAN BEEKUM FOR THE NEW YORK TIMESProsperity.allow “But the the wealthy tax code the shouldn’t kind of loopholes $89.5 million. A panel of judges ulti- $89.5 million. A panel of judges ulti- that let them, essentially, force other that let them, essentially, force other $29 million,$89.5 while million. the I.R.S. A panelplaced of it at judges ulti- A TAX BEGETSJOHN AVAN TAX BEEKUM BREAK FOR THE NEW YORK TIMES A TAX BEGETSallow the A TAXthatwealthy BREAK let the them, kind essentially, of loopholes force other $89.5 million.mately A decidedpanel of on judges mately $50 million, ulti- decided a deci- on $50 million, a deci- mately decided on $50 million,A TAX a deci-BEGETS A TAX BREAK that let them,taxpayers essentially, to underwrite forcetaxpayers other donations to underwrite to donations to taxpayers to underwrite donations to A TAX BEGETS A TAX BREAK mately decidedsion that on saved $50 million, the estatesion a that deci-more saved than the $20 estate more than $20 Mr.sion Lauder that saved pays the$400,000Mr. estate Lauder more in pays property than $400,000 $20 taxes annually in property on histaxesMr. Palm Lauderannually Beach pays on mansion. his$400,000 Palm Beach in property mansion.taxpayers taxestheir toannually underwrite pet causes.” on his donations Palmtheir Beachpet to causes.” mansion. their pet causes.” sion that saved the estate more than $20 Mr. Lauder pays $400,000 in property taxes annually on his Palm Beach mansion. their pet causes.” C M Y K Nxxx,2011-11-27,A,020,Bs-4C,E1 C M Y K Nxxx,2011-11-27,A,020,Bs-4C,E1 C M Y K Nxxx,2011-11-27,A,020,Bs-4C,E1 C M Y K Nxxx,2011-11-27,A,020,Bs-4C,E1 Nxxx,2011-11-27,A,020,Bs-4C,E1 C20 M Y KN THE NEW YORK TIMES NATIONAL SUNDAY, NOVEMBER 27, 2011

20 N THE NEW YORK TIMES NATIONAL SUNDAY, NOVEMBER 27, 2011 20 N THE NEW YORK TIMES NATIONAL SUNDAY, NOVEMBER 27, 2011 CME Enterprises, maintains an official head- Billionaire’s Playbook for Tax Avoidance To reduce his taxes, Ronald S. Lauder has used many of the techniques available to the wealthy to shelter his income while still having access to his money. 20 N THE NEW YORK TIMES NATIONAL SUNDAY, NOVEMBER 27, 2011 quarters in the tax haven of Bermuda, where it 20 N THE NEW YORK TIMES NATIONAL SUNDAY, NOVEMBER 27, 2011 Billionaire’s Playbook for Tax Avoidance ToOFFSHORE reduce CORPORATIONShis taxes, Ronald S. Lauder has usedNONPROFIT many of OR the CHARITABLE techniques FOUNDATION available to the wealthyBORROWING to shelter AGAINST his STOCKincome while still having accessFAMILY toTRUSTS his money. VARIABLE PREPAID FORWARD CONTRACT does not operate any stations. Billionaire’s Playbook for Tax Avoidance To reduce his taxes,C M RonaldY S.K Lauder has used many of the Thetechniques broadcast available companyNxxx,2011-11-27,A,020,Bs-4C,E1 to the Mr. wealthy Lauder to shelterMr. his Lauderincome has while donated still having extensively access fromto his money.Mr. Lauder has used hundreds of millions By creating trusts and putting family These are agreements to sell stock at a OFFSHORE CORPORATIONS NONPROFIT OR CHARITABLE FOUNDATION BORROWING AGAINST STOCK FAMILY TRUSTS VARIABLE PREPAID FORWARD CONTRACT Billionaire’s Playbook for Tax Avoidance To reduce his taxes, Ronald S. Lauder has used many ofAnd the techniques earlier this available year, to theMr. wealthy Lauder to shelter used hishis income founded,while still CMEhaving Enterprises, access to hisoperates money. an art collection worthTo reduce more histhan taxes, $1 Ronaldof S. dollars Lauder worth has usedof Estée many Lauder of the stock techniques as availableholdings, tosuch the aswealthy stock toand shelter real estate, his income in future while stildatel having for less access than itsto currenthis money. value, OFFSHORE CORPORATIONS NONPROFIT OR CHARITABLE FOUNDATION BORROWING AGAINST STOCK Billionaire’sFAMILY PlaybookTRUSTS for Tax AvoidanceVARIABLE PREPAID FORWARD CONTRACT stakeThe inbroadcast the family company business, Mr. Lauder Estée Mr.Lauder Lauder has donatedtelevision extensively stations fromin Europe Mr. but Lauder has has usedbillion hundreds to his privateof millions foundation, By creating entitling trusts collateraland putting for familylow-interest loans.These That are givesagreements those to trusts, sell stock Mr. Lauderat a and other in return for an immediate cash payment. OFFSHORE CORPORATIONS NONPROFIT ORThe CHARITABLE broadcast FOUNDATION company Mr. LauderBORROWING AGAINSTMr. Lauder STOCK Companies,has donatedfounded, extensively CME to Enterprises,createFAMILY from aTRUSTS tax operatesMr. shelter Lauder hasto avoidanused art hundreds collection as of worthVARIABLE headquartersOFFSHOREmillions more PREPAID CORPORATIONS thanBy in creating FORWARD$1tax-friendly trusts CONTRACTof Bermuda. dollarsand putting worth family ofhim NONPROFITEstée to Laudertax deductionsORThese CHARITABLEstock are as agreementsworth FOUNDATIONholdings, tens of to sellsuch stock as himBORROWINGstock at accessa and real AGAINSTto moneyestate, STOCK without in future having date to for lessmembersFAMILY than its TRUSTS current of his family value, have minimized VARIABLEThese deals PREPAID postpone FORWARD capital CONTRACT gains taxes founded, CME Enterprises, operates an art collectiontelevision worth more stations than $1in Europe butof dollarshas worth billionof Estée to hisLauder private stock foundation, as holdings, entitling such ascollateral stock and for reallow-interest estate, inloans. future That date gives for lessthose than trusts, its current Mr. Lauder value, and other in return for an immediate cash payment. The broadcast company Mr. Lauder Mr. Lauder has donated extensively from Mr. Lauder has used hundreds of millions By20 creating trusts Nand putting family TheseThe broadcast are agreements company to Mr.sell LauderstockTHE at NEWa YORKMr.millions Lauder TIMES of dollars.has NATIONAL donated extensivelySUNDAY, from NOVEMBER Mr.pay Laudercapital 27, gainshas 2011 used taxes hundreds by selling of themillions stock. Byestate creating taxes. trusts and putting family Thesefor Mr. areLauder. agreements to sell stock at a muchheadquarters as $10 million in tax-friendly in federal Bermuda. incomehim tax to taxfor deductions worth tens of him access to money without having to members of his family have minimized These deals postpone capital gains taxes founded, CME Enterprises, operates an art collectiontelevision worth stations more than in Europe $1 but hasof dollars worthbillion of Estéeto his privateLauder foundation,stock as entitlingholdings, suchcollateral as stock for and low-interest real estate, loans. in Thatfuturefounded, gives date CME forthose lessEnterprises, trusts,than its Mr. currentoperates Lauder value, and otheran art collectionin return worth for more an immediate than $1 cash payment.of dollars worth of Estée Lauder stock as holdings, such as stock and real estate, in future date for less than its current value, years. In June, regulatory filings show,millions Mr. of dollars. pay capital gains taxes by selling the stock. estate taxes. for Mr. Lauder. television stations in Europe but has billion to his headquartersprivate foundation, in tax-friendly entitling Bermuda.collateral forhim low-interest to tax deductions loans. That worth gives tens thoseof trusts,him Mr. access Lauder to and money other without havingintelevision return to for stations anmembers immediate in Europe of his cash familybut payment. has have minimized billion to hisThese private deals foundation, postpone entitling capital gainscollateral taxes for low-interest loans. That gives those trusts, Mr. Lauder and other in return for an immediate cash payment. headquarters in tax-friendly Bermuda. him to tax deductions worth tens of himC accessM Y tomillions moneyK of without dollars.Lauder having entered to intomembers a sophisticated ofpay his capitalfamilyNxxx,2011-11-27,A,020,Bs-4C,E1 havegains contract minimized taxes by to selling Thesethe stock. deals postponeestate taxes. capital gains taxes for Mr. Lauder. Billionaire’s Playbook for Tax Avoidanceheadquarters in tax-friendlyTo reduce Bermuda.his taxes, Ronaldhim S. Lauder to tax deductionshas used many worth of tens the techniquesof availablehim access to theto money wealthy without to shelter having his toincome memberswhile still havingof his family access have to his minimized money. These deals postpone capital gains taxes millions of dollars. pay capital gains taxes bysell selling $72 themillion stock. ofestate stock taxes. to an investment bank forEstée Mr. Lauder. Lauder millionsHeir’s of dollars. Fortune,pay capital Worth gains taxes by selling Billions, the stock. estate taxes. Is Artfullyfor Mr. Lauder.Sheltered in 2014Estée at a price OFFSHOREof Lauder about CORPORATIONS 75 percent of Heir’sits cur- NONPROFIT Fortune, OR CHARITABLE FOUNDATION WorthBORROWING AGAINST Billions, STOCK IsFAMILY Artfully TRUSTS ShelteredVARIABLE PREPAID FORWARD CONTRACT Estée Lauder Heir’srent value Fortune, in exchangeThe broadcast for cash company now. Worth Mr.The Lauder trans - Billions,Mr. Lauder hasFrom donated Page extensively 1 Is Artfullyfrom Mr. Lauder has used Sheltered hundreds of millions By creating trusts and putting family These are agreements to sell stock at a Estée Lauder Heir’s Fortune,20 WorthN action, Billions, known asfounded, a variable CME Enterprises, Isprepaid Artfully forward,operatesTHE NEW YORKan art TIMEScollectionSheltered NATIONAL worth more SUNDAY,than $1 NOVEMBERof dollars 27,worth 2011 of Estée Lauder stock as holdings, such as stock and real estate, in future date for less than its current value, Fromtelevision Page 1 stations in Europe but has billionEstéethe tax to his burden private onto foundation,Lauder small businesses entitling collateralHeir’s for low-interest Fortune, loans. That gives those trusts, Worth Mr. Lauder and other Billions, in return for an immediateIs Artfully cash payment. Sheltered minimizes potentialheadquarters losses in fortax-friendly shareholders Bermuda. himand tothe tax middle deductions class. worth Republicans tens of have him access to money without having to members of his family have minimized These deals postpone capital gains taxes From Page 1 the tax burden onto small businesses From Page 1 C M Y K Nxxx,2011-11-27,A,020,Bs-4C,E1and gives them access to cash. But because the millionsresisted, of saying dollars. the tax increases on the pay capital gains taxes by selling the stock. estate taxes. for Mr. Lauder. the tax burden onto small businessesBillionaire’s Playbookand the for middle Tax class. Avoidance RepublicansTo have reduce his taxes, Ronaldwealthy S. Lauder would hasFrom used harm Pagemany the 1of economy the techniques and available to the wealthy to shelter his income while still having access to his money. and the middle class. Republicans have I.R.resisted,S. does saying not classify the tax increases this as ona thesale, it allows the tax burden onto small businesses thecost taxjobs. burden onto small businesses resisted, saying the tax increasesOFFSHORE on the CORPORATIONSinvestorswealthy like would Mr. harmNONPROFIT Lauder the economy ORto CHARITABLEdefer and paying FOUNDATION taxes BORROWING AGAINST STOCK FAMILY TRUSTS VARIABLE PREPAID FORWARD CONTRACT and the middle class. Republicans have andAn the examination middle class. of publicRepublicans documents have wealthy would harm the economyThe andbroadcast company Mr.cost Lauder jobs. Mr. Lauder has donated extensively from Mr. Lauder has used hundreds of millions By creating trusts and putting family These are agreements to sell stock at a resisted, saying the tax increases on the for years. resisted,involving saying Mr. Lauder’s the tax increases companies, on the in- 20 cost jobs.N founded, CME Enterprises, operatesAnTHE examination NEW YORKanEstée of art public TIMES collection documents NATIONAL worth Lauder more SUNDAY,than $1 NOVEMBER ofHeir’s dollars 27, worth 2011 of Estée Fortune, Lauder stock as holdings, Worth such as stock and real Billions, estate, in future date for lessIs than Artfullyits current value, Sheltered wealthy would harm the economy and It was a common tax reduction strategy for wealthyvestments would and harm charities the economy offers and a An examination of public documentstelevision stations in Europeinvolving but has Mr. Lauder’sbillion to companies,his private foundation, in- entitling collateral for low-interest loans. That gives those trusts, Mr. Lauder and other in return for an immediate cash payment. cost jobs. costglimpse jobs. of the wide array of legal op- involving Mr. Lauder’s companies,headquarters in- in tax-friendlychief vestmentsBermuda. executives and and him charities wealthyto tax deductions offers shareholders worth a tens a of de - him access to money without having to members of his family have minimized These deals postpone capital gains taxes An examination of public documents From Page 1 tionsAn forexamination the world’s of wealthiestpublic documents citizens C M Y K vestmentsNxxx,2011-11-27,A,020,Bs-4C,E1 and charities offers a glimpse of the wide array of legal op- involving Mr. Lauder’s companies, in- Billionaire’s Playbook for Tax Avoidance To reducecade his ago, taxes, but Ronald in 2006millions S. Lauder the of I.R. dollars.has Sused. said many it appearedof the techniques availablepayinvolvingto avoid capital taxesto Mr.gainsthe both wealthy Lauder’s taxes at home byto companies,sellingshelter and theabroad. his stock.income in- whileestate stil taxes.l having access to his money. for Mr. Lauder. glimpse of the wide array of legal op- tions for the world’s wealthiest citizens vestments and charities offers a to be an abusive thetax taxshelter burden and onto issued small tighter businesses vestmentsHis vast holdings and charities — which offers include a tions for the world’s wealthiest citizens to avoid taxes both at home and abroad. glimpse of the wide array of legal op- OFFSHORE CORPORATIONS NONPROFIT OR CHARITABLE FOUNDATION BORROWINGand the middle AGAINST class. STOCK Republicans have glimpsehundredsFAMILY TRUSTS of of the millions wide in array stock, of one legal of the op- VARIABLE PREPAID FORWARD CONTRACT to avoid taxes both at home and abroad. restrictionsHis vast to holdings regulateresisted, — the whichsaying practice. includethe tax That increases ruling on the tions for the world’s wealthiest citizens The broadcast company Mr. Lauder Mr. Lauder has donated extensively from Mr. Lauder has used hundreds of millions Bytionsworld’s creating for largestthe trusts world’s privateand wealthiestputting collections family citizens of These are agreements to sell stock at a to avoid taxes both at home and abroad. His vast holdings — which include washundreds enough of to millions persuadewealthy in stock, wouldmost one harm wealthyof the the economy taxpay - and medieval armor, homes in Washington, 20 N founded, CME Enterprises, operatesTHE NEW YORKanEstée art collection TIMES NATIONAL worth Lauder more thanSUNDAY, $1 NOVEMBER ofHeir’s dollars worth 27, 2011 of Estée Fortune, Lauder stock as holdings,to avoidWorth taxes such bothas stock at home and real and Billions, estate, abroad. in future date for lessIs than Artfullyits current value, Sheltered hundreds of millions in stock, one of the world’s largest cost private jobs. collections of His vast holdings — which include television stations in Europe but has billion to his private foundation,ers to abandonentitling thecollateral technique, for low-interest according loans. to That tax gives thoseD.C.,His andtrusts, vast on holdingsMr. Park Lauder Avenue — and which other as wellinclude as in return for an immediate cash payment. hundreds of millions in stock, one of the world’s largest private collections of medieval armor, homesAn examination in Washington, of public documents oceanfront mansions in Palm Beach and headquarters in tax-friendly Bermuda. him to tax deductions worthlawyers tens ofand recordshim access at the to Smoneyecurities without and having Ex to- membershundreds ofof hismillions family inhave stock, minimized one of the These deals postpone capital gains taxes world’s largest private collections of medieval armor, homes in Washington, From Page 1 D.C., and on Parkinvolving Avenue Mr. as Lauder’s well as companies, in- the Hamptons — are organized in a lab- millions of dollars. pay capital gains taxes by selling the stock. estateworld’s taxes. largest private collections of for Mr. Lauder. medievalBillionaire’s armor, homes Playbook in Washington, for Tax AvoidanceD.C., andTo reduce on Park his taxes, Avenue Ronald as well S. Lauder as has used manychange oceanfrontof the Commission. techniques mansionsvestments available in Palm to theBeach and wealthy and charities to shelter offers his income a yrinth while stil of l trusts,having limitedaccess to liability his money. corpo- the tax burden onto small businesses medieval armor, homes in Washington, D.C., and on Park Avenue as well as oceanfront mansions in Palm Beach and theAdvisers Hamptons to — Mr. glimpseare organizedLauder of the in maintain wide a lab- array that of legal his op- rations and holding companies, some of and the middle class. Republicans have D.C., and on Park Avenue as well as oceanfrontOFFSHORE CORPORATIONS mansions in Palm Beach and NONPROFIT ORthe CHARITABLE Hamptons FOUNDATION — are organized inBORROWING a lab- AGAINST STOCK yrinth of trusts, tions limitedFAMILY for TRUSTS liability the world’s corpo- wealthiest citizens whichVARIABLE his PREPAID lawyers FORWARD acknowledge CONTRACT are in- resisted, saying the taxdeal increases “was on made the in compliance with published oceanfront mansions in Palm Beach and theThe Hamptons broadcast —company are organized Mr. Lauder in a lab- Mr. Lauder yrinthhas donated of trusts, extensively limited from liability Mr. corpo- Lauder has used hundredsrations of millions and holding toBy avoid companies, creating taxes trusts both some and at of home putting and family abroad. tendedThese are for agreementstax purposes. to Thesell stock cable at tele- a wealthy would harm theI.R. economyS. guidance and on these types of transactions the Hamptons — are organized in a lab- yrinthfounded, of trusts,CME Enterprises, limited liability operates corpo- Estéean art collectionrations worth andLauder moreholding than companies, $1 someofHeir’s dollars of worth of Estée Fortune, Lauderwhich stock his lawyersas holdings, Hisacknowledge vast Worth such holdings asare stock in- — and which real Billions, estate, include in visionfuture date network for less Is he than built Artfully its in current Central value, Eu- Sheltered cost jobs. yrinth of trusts, limited liability corpo- rations and holding companies, some of which his lawyers acknowledge are in- andtended was forfully tax reportedpurposes.hundreds The as of millionscablerequired tele- in stock, by Sone.E.C. of the rope, CME Enterprises, maintains an television stations in Europe but has billion to his private foundation, entitling collateralAn examination for low-interest of public loans. documents That gives those trusts, Mr. Lauder and other rationsin return and for holdingan immediate companies, cash payment. some of which his lawyers acknowledge are in- tended for tax purposes. The cable tele- rules,”vision said network his spokesman, heworld’s built in largest Central Gary private Eu-Lewi. collections of official headquarters in the tax haven of headquarters in tax-friendly Bermuda. him to tax deductions worth tens of involvinghim access Mr. to money Lauder’s without companies, having to in- members of his family have minimized whichThese hisdeals lawyers postpone acknowledge capital gains are taxes in- tended for tax purposes. The cable tele- visionFrom network Page 1 he built in Central Eu- rope, CME Enterprises,medieval maintainsarmor, homes an in Washington, Bermuda, where it does not operate any millions of dollars. vestmentspay capital gains and taxes charities by sellingIn offerstheory, the stock. a Mr. estate Lauder taxes. is scheduled to pay tendedfor Mr. Lauder.for tax purposes. The cable tele- vision network he built in Central Eu- rope, CME Enterprises, maintains an official headquartersD.C., in and the tax on Parkhaven Avenueof as well as stations. the tax burden onto small businesses glimpse of the wide array of legal op- vision network he built in Central Eu- rope, CME Enterprises, maintains an official headquarters in the tax haven of taxesBermuda, on the where $72 oceanfrontitmillion does not when operatemansions the any in sharesPalm Beach are and And earlier this year, Mr. Lauder and the middle class. Republicans have tions for the world’s wealthiest citizens rope, CME Enterprises, maintains an official headquarters in the tax haven of Bermuda, where it does not operate any actuallystations. delivered the in Hamptons 2014. But — taxare organizedexperts insay a lab- usedMr. his Lauder’s stake in themore family recent business, tax returns re- resisted, saying the tax increases on the to avoid taxes both at home and abroad. official headquarters in the tax haven of Bermuda, where it does not operate any wealthy wouldstations. harm the economy and wealthyAnd taxpayers earlier thisyrinth can year, of use trusts, Mr. other Lauder limited accounting liability corpo- mainEstée private, Lauder Companies,and he declined to create to a make them Estée Lauder Heir’s Fortune,His vast Worth holdings — whichused Billions, his include stake in the family business, Is ArtfullyBermuda, Sheltered where it does not operate any stations. And earlier this year, Mr. Lauder rations and holding companies, some of tax shelter to avoid as much as $10 mil- cost jobs. hundreds of millions intechniques stock, one of tothe further defer their payment. availablestations. for this article. And earlier this year, Mr. Lauder used his stake in the family business, Estée Lauder Companies,which his lawyers to create acknowledge a are in- lion in federal income tax for years. In An examination of public documents world’s largest private collections of And earlier this year, Mr. Lauder used his stake in the family business, Estée Lauder Companies, to create a taxThe shelter tax toburden avoidtended as on much for the tax as nation’s purposes.$10 mil- supereliteThe cable tele- June, regulatory filings show, Mr. Lau- From Page 1 involving Mr. Lauder’s companies, in- medieval armor, homes in Washington, used his stake in the family business, Estée Lauder Companies, to create a tax shelter to avoid as much as $10 mil- lion in federal incomevision tax network for years. he built In in Central Eu- Theder Family entered Fortune into a sophisticated con- vestments and charities offers a D.C., and on Park Avenuehas steadily as well declined as in recent decades, accord- Estée Lauder Companies, to create a taxthe shelter tax burden to avoid onto as much small as businesses $10 mil- lion in federal income tax for years. In June, regulatory rope,filings CME show, Enterprises, Mr. Lau- maintains an tract to sell $72 million of stock to an in- glimpse of the wide array of legal op- oceanfront mansions ining Palm to Beacha sliver and of data released annually by the taxMr. shelter Lauder, to avoid now as much67, was as $10born mil- into a storied BILL CUNNINGHAM/THE NEW YORK TIMES lionand in the federal middle income class. Republicanstax for years. have In June, regulatory filings show, Mr. Lau- der entered intoofficial a sophisticated headquarters con- in the tax haven of vestment bank in 2014 at a price of tions for the world’s wealthiest citizens the Hamptons — are organized in a lab- lion in federal income tax for years. In June,resisted, regulatory saying thefilings tax show,increases Mr. onLau- the der entered into a sophisticated con- I.R.tractS. The to sell effective $72 millionBermuda, federal of stock where income to itan does in- tax not rate operate for any Americanabout 75 percent fortune. of itsHis current mother, value Estéein Lauder, BILLTHE CUNNINGHAM/THE COLLECTOR NEW YORK TIMES to avoid taxes both at home and abroad. yrinth of trusts, limited liability corpo- June, regulatory filings show, Mr. Lau- wealthy would harm the economy and tract to sell $72 million of stock to an in- the vestment400 wealthiest bank stations. in taxpayers, 2014 at a price representing of the the daughter of Eastern European immigrants, BILL CUNNINGHAM/THE NEW YORK TIMES der entered into a sophisticated con- His vast holdings — which include derexchange entered for cash into now. a sophisticated The transaction, con- To celebrateTHE COLLECTOR the 10th anniversary of his Neue Galerie, Ronald Lauder exhibited works from his personal collection, including Cézannes. cost jobs. vestment bank in 2014 at a pricerations of and holding companies,about some 75 percent of ofAnd its current earlier value this in year, Mr. Lauder tract to sell $72 million of stock to an in- hundreds of millions in stock, one of the top 0.000258 percent, fell from about 30 percent begantractknown tosellingBILL assell CUNNINGHAM/THE a $72 variable homemademillion NEW prepaidof stockYORK beautyTIMES forward,to an in- creams at a An examination of public documents about 75 percent of its current valuewhich in his lawyers acknowledgeexchange are forin- cash now. The transaction, To celebrateTHE COLLECTOR the 10th anniversary of his Neue Galerie, Ronald Lauder exhibited works from his personal collection, including Cézannes. BILL CUNNINGHAM/THE NEW YORK TIMES vestment bank in 2014 at a price of world’s largest private collections of used his stake in the family business, vestmentminimizes bank potential in 2014 losses at a for price share- of involving Mr. Lauder’s companies, in- exchange for cash now. The transaction,tended for tax purposes.in The1995known cable to THE as 18tele- a COLLECTOR percent variable prepaidin 2008, forward, the most recent few New York City hair salons in the 1940s and about 75 percent of its current value in medieval armor, homes in Washington, To celebrate the 10thEstée anniversary Lauder Companies, of his Neue to Galerie, create Ronald a aboutholders Lauder 75 and percent exhibitedgives of them its workscurrent access from valueto cash. his in personal collection, including Cézannes. ly $400 million of that stock is pledgedTHE toCOLLECTORholds with more than $1 million in in- calling Mr. Lauder and his wife two of vestments and charities offers a known as a variable prepaid forward,vision network he builtdata inminimizes Centralavailable. Eu- potential losses for share- built her product line into a multibillion-dollar exchange for cash now. The transaction, D.C., and onTo Parkcelebrate Avenue the as10th well anniversary as of his Neue Galerie, Ronald Lauder taxexhibited shelter worksto avoid from as much his personal as $10 mil- collection,exchangeBut because including for thecash I.R.S.Cé now.zannes. does The transaction,not classify secure various lines of credit. Many fi- come claimed more than $27 billion in “the nation’s pre-eminent supporters of glimpse of the wide array of legal op- minimizes potential losses forrope, share- CME Enterprises, maintainsholders and an gives them access to cash. ly $400 million of Butthat stockNobody isTo pledged celebrate Pays to That theholds 10th with anniversary more than of $1 his million Neue inGalerie, in- callingRonald Mr. Lauder Lauder exhibited and his works wife two from of his personal collection, including Cézannes. known as a variable prepaid forward, oceanfront mansions in Palm Beach and When Mr. Lauderlion in ran federal unsuccessfully income tax for for years. the In globalknownthis as empire. a as sale, a variableit allows investors prepaid forward, like Mr. nancial planners consider it imprudent such deductions from 2006 to ’09, ac- the arts and civic causes.” tions for the world’s wealthiest citizens holders and gives them access officialto cash. headquarters in theBut tax because haven of the I.R.S. does notly $400 classify million of that stock is pledged to holds with moresecure than various $1 million lines in of in- credit. Many fi- come claimed more than $27 billion in “the nation’s pre-eminent supporters of minimizes potential losses for share- the Hamptons — are organized in a lab- June, regulatory filings show,But Mr. Nobody Lau- PaysminimizesLauderAs That the to defer son potential payingof a lossesfabulously taxes for for years. share- wealthy Articles fashion in this calling series Mr. are Lauder examining and ef- his wifefor two principal of shareholders in a company cording to a report this month by Sena- Mr. Lauder said his life was changed to avoid taxes both at home and abroad. But because the I.R.S. does not Bermuda,classify where it doesRepublican notthis operate as a sale, anynomination it allows investors for securemayor like variousMr. of New lines York of credit. Many fi- come claimed nancial more than planners $27 billion consider in it “theimprudent nation’s pre-eminentsuch deductions supporters from of 2006 to ’09, ac- the arts and civic causes.” holders and gives them access to cash. yrinth of trusts, limited liability corpo- ly $400 millionBut of Nobodythat stock Paysis pledged That to derholds entered with more into than a sophisticated $1 million in con- in- holderscallingIt was Mr.and a common Laudergives them andtax reductionaccess his wife to two strat-cash. of forts by businesses to lower their taxes lyto $400borrow million against of that their stock stock. is pledged But it re- to holdstor Tom with Coburn more of than Oklahoma, $1 million who in said in- calling25 years Mr. ago Lauder when and he his visited wife twoa kin- of His vast holdings — which include this as a sale, it allows investors stations.like Mr. andLauder released to defer his paying taxtract return to taxes sell nancial$72for to years.millionthe planners public, of stockArticles considerhe to re anin- thisin- it icon,imprudentseries areMr. examining Laudersuch deductions ef-developedfor fromprincipal aristocratic 2006 shareholders to ’09, tastes ac- in thea company arts and civiccording causes.” to a report this month by Sena- Mr. Lauder said his life was changed But because the I.R.S. does not classify rations and holding companies, some of secure various lines of credit. Many fi- come claimed more than $27 billion in Butegy“the because fornation’s chief thepre-eminent executives I.R.S. does supporters and not wealthyclassify of and the debate over how to improve the securemains a various popular lines way of for credit. wealthy Many tax- fi- comesome BILLwealthy claimed CUNNINGHAM/THE taxpayers more than NEW even YORK $27 TIMESdeducted billion in “thedergarten nation’s in pre-eminent Austria and supporters met a class- of hundreds of millions in stock, one of the But NobodyLauder Pays to deferThat paying taxes for years.And earlierArticles this in year, this series Mr.It was are Lauder aexamining common taxef- reductionfor principal strat- shareholdersforts by businesses in a company to lower theircording taxes to a reportto borrow this month against byBut their Sena- Nobody stock. ButMr. Pays itLauder re- That saidtor Tom his lifeCoburn was changedof Oklahoma, who said 25 years ago when he visited a kin- this as a sale, it allows investors like Mr. which his lawyers acknowledge are in- nancial planners considerported it imprudent paying 30 vestmentsuchpercent deductions bankin total in from 2014federal, 2006 at a to state price ’09, ac- of — thisshareholderstheand artsas grand a andsale, civic itaaspirations allowsdecade causes.” investors ago, —but at likein an2006 Mr. earlytax age. system. He nancialpayers toplanners get cash consider out of their it imprudent holdings suchmortgage deductions interest fromon their 2006 yachts. to ’09, ac- theroom arts full and of civic Jewish causes.” children who were world’s largest private collections of Articles in thisIt series was area common examining tax ef-reductionused strat- his stakeforts inby thebusinesses familyegy to business, for lower chief their executives taxes andto borrow wealthy againstand their the debate stock. over But howit re- to improvetor Tom the Coburnmains of Oklahoma, a popular who way said for wealthy25 years tax- ago some when wealthy heTHE visitedCOLLECTOR taxpayers a kin- even deducted dergarten in Austria and met a class- Lauder to defer paying taxes for years. tended for tax purposes. The cable tele- for principal shareholdersand in city a company taxes on aboutcordingabout 75 $30to percent a millionreport of thisits in currentmonth income byvalue inSena- in summeredLaudertheMr. I.R.S. Lauder to saiddefer in Vienna saidit paying appeared his lifeastaxes atowas boy, forbe changed anyears. developing abu- Articles a pas in this- series are examining ef- forwithout principal selling shareholders and paying intaxes. a company cordingAnd there to a reportis no limit this on month the amount by Sena- of refugeesMr. Lauder from said Russia. his life Still, was he changed said he medieval armor, homes in Washington, egy for chief executives and wealthyEstée Lauder Companies,shareholders to create a a decade ago, butmains in 2006 a populartax waysystem. for wealthy tax- some wealthy taxpayerspayers to geteven cash deducted outONLINE: of theirdergartenPrevious holdings articles in Austriamortgage in this and interest met a on class- their yachts. room full of Jewish children who were It was a common tax reduction strat- visionforts by network businesses he to built lower in their Central taxes Eu- to borrow againstand the their debate stock. over But how it to re- improveexchangetor theTom Coburn for cash of now. Oklahoma, The transaction, who said sive25It years was tax ashelter agocommonTo celebrate when and tax issuedhe reduction the visited 10th tighter a strat-anniversary kin- re- forts ofby his businesses Neue Galerie, to lower Ronaldtheir taxes Lauder toexhibited Thereborrow is againstaworks certain fromtheir irony stock.his that personal ButMr. itLau- re- collection,torproperty Tom including Coburn taxes thatofCé Oklahoma,zannes. can be deductedwho said 25found years it odd ago to whenbe referred he visited to as aa phi- kin- D.C., and on Park Avenue as well as shareholders a decade ago, but taxin 2006shelter to avoid as1988. muchthe At as I.R.S. the$10 mil-saidtime, it appearedhisknown net asworth to a payers be variable an was abu- to estimatedget prepaid cash out forward, atof theirsion holdings for Austrianmortgage art interest andwithout onmedieval their selling yachts. andarmor. payingseries: At taxes. room full of JewishAnd children there is no who limit were on the amount of refugees from Russia. Still, he said he egy for chief executives and wealthy rope,and the CME debate Enterprises, over how to maintainsimprove the an mains a populartax system. way for wealthy tax- some wealthy taxpayers evenONLINE: deductedPreviousegystrictionsdergarten forarticles chief to in inregulate Austria executivesthis the and practice. and met wealthy a class-That and the debate over how to improve the mainsder has a used popular $72 way million for worthwealthy of tax- his somefrom federalwealthy income. taxpayers So even Mr. Lauderdeducted is dergartenlanthropist. in Austria and met a class- oceanfront mansions in Palm Beach and the I.R.S. said it appeared to be lionan abu- in federal income nearlytax sivefor years.a tax quarter shelter In of and a billion issued without tighterdollars. selling re- and paying taxes.age 13, he bought his firstThere Schiele is a certainwith moneyirony that refugees Mr. Lau- from property Russia. Still, taxes he that said can he be deducted found it odd to be referred to as a phi- shareholders a decade ago, but in 2006 officialtax system. headquarters in the tax haven of payers to get cash out of their holdings minimizesmortgage interest potential on their losses yachts. for share- shareholdersrulingroom full was of enough JewishaAnd decade there children to ago, persuadeis no but limit who in on mostwere2006 the amountnytimes.com/businessday of payersEstée Lauder to get sharescash out to ofcarry their out holdings his lat- mortgageentitled to interest deduct onthe their $400,000 yachts. he pays room“I did full what of Jewish I wanted children to do,” who he weresaid. the Hamptons — are organized in a lab- sive tax shelter and issued tighterJune, re- regulatoryONLINE: filings Previousshow,strictions Mr. articles Lau- to regulate in holdersthis the andpractice. givesThere Thatthem is a certainaccessseries: toirony cash. that Mr. Lau- property taxesder that has can used be $72 deductedtaxly million$400 system. million worthfound of ofthat it hisodd stock tofrom isbe pledged referred federal to to income. asholds a phi- So with Mr. more Lauder than is $1 millionlanthropist. in in- calling Mr. Lauder and his wife two of the I.R.S. said it appeared to be an abu- Bermuda, where it does not operate any without selling and paying taxes. And there is no limit on the amount of thewealthyrefugees I.R.S. taxpayers fromsaid it Russia. appeared to abandon Still, to hebe the an said tech-abu- he withoutest state-of-the-art selling and payingtax reduction taxes. tactic. annuallyAnd there on hisis no Palm limit Beach on the mansion amount asof refugees“What I thought from Russia. was right.” Still, he said he yrinth of trusts, limited liability corpo- ONLINE:strictionsPrevious toarticles regulate in this the practice.der That entered intoseries: a sophisticatedruling was con- enoughBut tobecause persuadeder the has I.R.S. most used does $72nytimes.com/businessday not million classify worth of his from federal income.Estée Lauder So Mr. shares Laudersecure to iscarry variouslanthropist. out lineshis lat- of credit.entitled Many to deduct fi- come the $400,000 claimed he more pays than $27“I billiondid what in I wanted“the nation’s to do,” pre-eminent he said. supporters of sive tax shelter and issued tighter re- stations. There is a certain irony that Mr. Lau- property taxes that can be deducted sivenique,Butfound taxNobody it according odd shelter to Paysbe and toreferred That issued tax lawyers to tighter as a andphi- re- ONLINE: Previous articles in this TheseThere contracts is a certain emerged irony that as a Mr. popular Lau- propertywell as what taxes he that pays can on hisbe deductedhome on found it odd to be referred to as a phi- rations and holding companies, some of series: ruling was enough to persuadetract most to sell $72 million of stockwealthy to an taxpayers in- to abandon the tech- est state-of-the-art tax reduction tactic. annually on his Palm BeachBILL CUNNINGHAM/THE mansion as NEW YORK“What TIMES I thought was right.” strictions to regulate the practice. That And earlier this year, Mr. Lauder der has usednytimes.com/businessday $72 million worth of his thisfrom as federal a sale,Estée income.it allows Lauder Soinvestors shares Mr. Lauder like to carry Mr. is outstrictionsrecordslanthropist. his lat- at to the entitled regulate Securities to the deduct andpractice. Exchangethe $400,000That nancialhe paysseries: planners“I did consider what Iit wanted imprudent to do,” toolsuchhe said. about deductions a decade from ago 2006and were to ’09, devel- ac- Parkthe arts Avenue and civic and causes.” his holdings in the A Passion for Art which his lawyers acknowledge are in- vestment bank in 2014 atnique, a price according of to tax lawyers and These contracts million emerged in taxes. as a popular der has used $72 million worth of his from federal income. So Mr. Lauder is lanthropist. ruling was enough to persuade most usednytimes.com/businessday his stakewealthy in the taxpayers family business,to abandon theEstée tech- Lauder shares to carry out his lat- Lauderentitled toto defer deductest state-of-the-artpaying the $400,000taxes for tax heyears. reductionpays Commission.Articles tactic.“I did in what thisannually seriesI wanted areon hisexaminingto do,”Palm he BeachTHE ef-said. COLLECTOR mansionfor principal as “What shareholders I thought inwell was a company as right.” what he opedcording pays by on to accountants his a report home this on and month tax plannersby Sena- Hamptons.Mr. Lauder said his life was changed about 75 percent of its currentrecords value at thein Securities and Exchange ruling was enough to persuade most nytimes.com/businessdayEstée Lauder Companies went public Estée Lauder shares to carry out his lat- entitled to deduct the $400,000 he pays “I did what I wanted to do,” he said. wealthytended fortaxpayers tax purposes. to abandon The cablethe tech- tele- Estée Laudernique, Companies, according to to create tax lawyers a est state-of-the-art and tax reduction tactic. annuallyIt was aon commonThese his Palm contracts tax Beach reductionmillion mansion emerged instrat- taxes. as as a forts“What popularAdvisers by I businesses thought wellto Mr. aswas Lauderto what lowerright.” hemaintaintool their pays about taxes onthat a hisdecade hometo borrowago on and against were devel- their stock.Park But Avenue it re- andaftertor his Tom Congress holdings Coburn closed inof Oklahoma, the downA the Passion who loophole said for25 Art “This years welfare ago when for the he well-off visited — a cost- kin- In the United States, Mr. Lauder has exchange for cash now. TheCommission. transaction, To celebrate the 10th anniversarywealthy of his taxpayers Neue Galerie, to abandon Ronald the tech- Lauder inexhibited 1995, and works Ronald from Lauder his personal and his collection,est state-of-the-art including Cé taxzannes. reduction tactic. annually on his Palm Beach mansion as “What I thought was right.” nique,vision according network he to built tax in lawyers Central and Eu- tax shelter torecords avoid atas themuch Securities as $10 mil- and ExchangeThese contracts emerged as a popular egywell for as what chieftool he executives about pays a ondecade andhisEstée homeago wealthy Lauder and on were Companieshisand devel- deal the debate “was wentPark made over public Avenue how in compliance to andopedimprove his by thewith holdingsaccountantsmains in the and a popular taxA plannersPassion way for for Hamptons. wealthy Art tax- onsome the wealthy Estée taxpayers Lauder public even deducted offering. ingdergarten billions in of Austriadollars a and year met — is a class-being focused on what he calls his greatest known as amillion variable in taxes. prepaidAdvisers forward, to Mr. Lauder maintain that nique, according to tax lawyers and mother cashed in hundreds of millions These contracts emerged asIn a the popular United States,well as Mr. what Lauder he pays has on his home on recordsrope, CME at the Enterprises, Securities and maintains Exchange an lion in federalCommission. income tax for years. In tool about a decade ago and were devel- shareholdersPark Avenueoped a anddecade by his accountants ago, holdingsin but 1995, in in and 2006 and the tax Ronald plannerspublishedtax system. Lauder I.R.S.Hamptons. and guidance his after on Congress these closedpayers down to get the cashloophole out of their“This holdings welfare forThemortgage the I.R.S. well-off interest began — cost-on cracking their yachts. down on paidroom for full with of Jewishthe taxes children of the less who fortu- were passion — art. million in taxes. minimizes potentialEstée Lauder losseshis Companies fordeal share- “was went made public in compliance with recordsA Passion at the for Securities Art and Exchange of dollars in stockIn the but United managed States, to side-Mr. Laudertool abouthas a decade ago andfocused were devel- on whatPark he calls Avenue his greatestand his holdings in the A Passion for Art Commission.official headquarters in the tax haven of June, regulatoryAdvisers filings to show, Mr. Lauder Mr. Lau- maintainoped that by accountants and tax planners theHamptons. I.R.S. said after it appearedCongress mothertoclosed be an down cashedabu- the inloopholetypes hundreds of transactions of“This millions welfare and on was for the fullythe Estée well-off re- Lauder millionwithout— cost- publicin selling taxes. offering. and paying ingtaxes. billions of dollarstheseAnd a contractsyearthere — is isno inbeing limit 2008, on the and amount has pur- of nate,refugees many from who Russia. are working Still, he two said jobs he In 1976, at age 32, his generous dona- Estée Lauder Companies went public holders andin gives 1995, them and access Ronaldpublished to Laudercash. I.R.S. and guidance his on these Commission.ly $400ONLINE: million Previous of that stockarticles is pledgedin this to stepholds paying with focused more tens thanof on millions $1 what million inhe federal calls in in- his greatestopedcalling by Mr. accountants Lauder and and his passion tax wife planners two — art. of Hamptons. Bermuda,Advisers whereto Mr. itLauder does not maintain operate that any der enteredhis into deal a “was sophisticated made in compliance con- after with Congress closed down the loophole sive“This tax welfare shelteron the for and Estéethe issued well-off of Lauder dollars tighter — cost- public in re- stock offering.ported butIn themanaged as United requireding tobillions States, side- by S.E.C. ofMr. dollarsThe Lauderrules,” I.R.S. a yearsaid has began — is EstéeTherebeing cracking Lauderis a certain down Companies onirony thatpaid went Mr.for public withLau- the suedpropertytaxes aof prominent the taxes less thatfortu- case can against be deducted the bil- justfound to itmake odd endsto be meet, referred and toi.o.u.’s as a to phi- be tionsIn the helped United him States, become Mr. the Lauder youngest has in 1995, and Ronald Lauder and his But becausemother the I.R.S. cashed doestypes innot hundreds classify of transactions of millions and was fully re- secureAdvisersseries: various to Mr. lines Lauder of credit. maintain Many that fi- capitalcome claimed gainspassion taxes more — by than art. using $27 a billion hedging in after“the nation’sCongress pre-eminent closed down supporters theIn loophole1976, at of age 32,“This his generous welfare fordona- the well-off — cost- hisstations. deal “was made in compliance with tract to sell published$72 million of I.R.S. stock guidance to an in- onon these the Estée Lauder public offering. strictionsButing billions Nobody to Theof regulate dollars Pays I.R.S. theThata year began practice.step — payingcrackingis beingThat tens downhisfocused of spokesman, millions on on paid what in Gary federalfor he with Lewi. calls thethese his taxes greatest contracts of the less inder fortu- 2008, 1995, has usedand and has Ronald $72 pur- million Lauder nate, worth and many of his who lionairefrom are working federal Philip income. twoAnschutz, jobs So Mr.who Lauderused one is paidlanthropist. off by future generations,” said focusedtrustee of on the what Metropolitan he calls hisMuseum greatest of mother cashed in hundreds of millions this as a sale,of itdollars allows in investors stockported but like asmanaged requiredMr. to by side- S.E.C. rules,” said hisnancial deal planners“was made consider in compliance it imprudent with techniquesuch BILL deductions CUNNINGHAM/THE knownIn 1976, from as atNEW shorting 2006age YORK 32,to TIMES his against’09, generous ac- onthe dona- thearts and Estée civic Lauder causes.” public tions offering. helped himing become billions the of youngestdollars a year — is being publishedAnd earlier I.R.S. this guidance year, Mr. on Lauder these vestment banktypes in of 2014 transactions at a price and of was fullyThe re- I.R.S. began cracking down on rulingpaid for was with these enough the taxes contracts to of persuade thecapital in less 2008, gainsfortu- most and taxes hasnytimes.com/businessdaypassion In by pur- theory, using — art.nate, Mr. a hedging Lauder many whois suedscheduled are a working prominent to twomotherEstée case jobs Lauder against cashed shares the in hundreds bil- to carryjust ofout to millions hismake lat- endstoentitled meet, avoid and to more deducti.o.u.’s than tothe be $140 $400,000 million he in pays fed- Senator“I did Coburn,what I wanteda Republican, to do,” whohe said. has passionArt. He —later art. served as chairman of the of dollars in stock but managed to side- Lauder to deferstep paying paying taxes tenshis for ofspokesman, years. millions inGary Articles federal Lewi. in this series are examining ef- publishedfor principal I.R.S. shareholders guidance in aon company these thecording box. to ations report helped this month him become by Sena- the youngestTheMr. I.R.S. Lauder began said his cracking life trusteewas down changed of the on Metropolitanpaid for with Museum the taxes of of the less fortu- typesused of his transactions stake in the and family was business,fully re- about 75 percentported of as its required current by value S.E.C. in rules,”these said contracts in 2008, and has pur- wealthynate, many taxpayerssued who a are to prominent abandon workingtechnique casethe twoTHE tech- jobsagainst knownCOLLECTOR paythe asIn taxes bil-1976, shorting at onjust age the againstto 32, $72make his million generousendslionaire meet, when dona-Philip and the i.o.u.’s Anschutz,ofest dollars tostate-of-the-art be who in stock used but onetax managed reductionpaid offto tactic. side- by futureeralannually generations,”taxes. on his Palm said Beach mansion as “What I thought was right.” MuseumIn 1976, of at Modern age 32, Arthis andgenerous remains dona- an step paying tens of millions in federal It was a commoncapital gains tax reduction taxes by strat- using a hedgingforts by businesses to lower their taxes typesto borrow of transactions against their and stock. was But fully it re-re- torTogether, Tom Coburn trusteeMr. Lauderof Oklahoma,of the and Metropolitan his who mother said Museumthese25 years of contracts ago when in 2008, he visited andArt. hasHe a later pur- kin- servednate,called as many forchairman limits who onof are the tax working breaks two for high jobs portedEstée as Lauder required Companies, by S.E.C. rules,” to create said a exchange forhis cash spokesman, now. The Gary transaction, Lewi. sued a prominent case againstIn theory, the bil- Mr. Laudernique, accordingis scheduledlionaire to Philip to tax Anschutz, lawyers and who usedsharestions one helped are paid actually him off become bydelivered future to the avoid youngest in generations,” 2014. more thanstepThese $140 said paying contracts million tens in emerged of fed- millions Senator as ina popular federal Coburn, wella Republican,Whether as what or henotwho paysthe has I.R.S. on his agrees home with on tionshonorary helped chairman. him become He thehas youngest donated capital gains taxes by using a hedging egy for chiefTotechnique celebrate executives known the and 10th as wealthy shortinganniversary andjust against totheof make his debate Neue ends over Galerie,meet, how andto theimproveRonald i.o.u.’s box. totheLauder be portedmainsexhibited as a popularrequired works wayfrom by S.E.C. for his wealthy personal rules,” said tax- collection,borrowedsome wealthyincluding 13.8 taxpayersmillion Cézannes. shares even of deducted compa- sueddergarten a prominent in Austria case and against Museum met a the class- of bil- Modernjustearners. Art to makeand remains ends meet, an and i.o.u.’s to be histax spokesman, shelter to avoid Gary asLewi. much as $10 mil- In theory, Mr. Lauder is scheduledlionaire to Philip Anschutz, whopay used taxes one on therecords $72 million at theto when avoidSecurities the more and than Exchange $140 millionButtrustee in fed-tax ofexperts theSenator Metropolitan say Coburn, wealthyeral Museuma taxpayers Republican,taxes. of whocapitaltool abouthas gains a Art.decade taxes He agolater by usingand servedcalled were a hedging as fordevel- chairman limits onPark of tax the Avenue breaks forand high his holdings in the and lent artwork to an assortment of knowntechnique as a known variable as prepaid shorting forward, against shareholdersthe a box.decade ago, but in 2006 paid off by future generations,”Together, said Mr. Lauderhismillion spokesman, inand taxes. his motherGary Lewi. ny stock from relatives and sold them to lionaireMr. Lauder’s Philip contentionAnschutz, who thathonorary used his con- one chairman.paidA Mr.Passion He offLauder byhas for futurededucts donated Art generations,” property taxes said on trustee of the Metropolitan Museum of lionIn theory,in federal Mr. income Lauder taxis scheduled for years. to In pay taxes on the $72 million when the shares are actuallyCommission.tax system. deliverederal in taxes. 2014. payersArt. He tolater get servedcash out as ofchairman theirWhether holdings of the or nottechniqueopedmortgage the I.R.S. by accountants interest agrees knownMuseum withon as of their and shortingModern earners.yachts. tax planners Art against and remainsroom an full of Jewish children who were museums. Part of his collection of lav- minimizesthe box. potential losses for share- to avoid moreTogether, than $140 Mr. million Lauder in and fed- his Senatormother Coburn, a Republican,borrowed who has13.8 millioncanInEstée use theory,shares otherLaudercalled Mr.of accounting compa- CompaniesLauder for limits is techniques scheduled went on tax public breaks to for high totractHamptons. avoid is legitimate, more than some $140 million tax policy in fed- ex- all of his holdings, his spokesman said. Art. He later served as chairman of the June, regulatory filings show, Mr. Lau- shares are actually delivered the in 2014.I.R.S. said it appeared Butto be tax an expertsabu- sayAdvisers wealthy to taxpayers Mr. Lauder maintain that withoutMuseum selling of Modern and paying Art and Mr.taxes. remains Lauder’s an contentiontheAnd box. public there that duringhonorary is hisno limit con-the chairman. offeringon the amount at He $26 ofhas a donatedrefugees from Russia. Still,and he lent said artwork he Senator toIn anthe Coburn,assortmentUnited States,a Republican, of Mr. Lauder who has ishly decorated ceremonial armor is on pay taxes on the $72 million when the holders and gives them access to cash. eral taxes. borrowed 13.8 million shares of lycalledcompa- $400ONLINE: formillion limitsPreviousWhether of onthat tax stock articles or breaks notny is pledgedstockinthe forthis I.R.S. from high to agrees relativespayfurtherinholds 1995,with taxes and with defer and sold onearners. more their the Ronaldthem than $72payment. to million Lauder $1 million when and in the his in- aftercalling Congress Mr. Lauder closed and down his the wifeMr. loophole Lauder two of deductseralperts“This taxes. property say welfare the taxes deal for the illustrateson well-off how— cost- the Mr. Lauder declined to say how much Museum of Modern Art and remains an der entered into a sophisticated con- Together,But Mr. taxLauder experts and sayhis motherwealthy taxpayerssive tax shelter and issuedcan tighter use other re- accountinghis deal “wastechniques made into compliance with honoraryThere is chairman.a certain irony He tractthat has Mr. donated is legitimate,Lau- share.property Together, some Selling tax taxes and Mr. policy borrow Lauder lent that ex- artworked can and shares be his todeducted mother in an this assortmentfound ofit odd to be referredmuseums. to as a phi- Part ofcalledfocused his collection for on limits what of on he lav- tax calls breaks his greatestfor high display at the Met, in a gallery named shares are actually delivered in 2014. But because the I.R.S. does not classify Whether nyor notstock the from I.R.S. relatives agrees andwith sold secureearners.themseries: to variousMr. lines Lauder’s of credit. contentionthe public Many during fi-that hissharesmothercome theThe con- offering claimed tax are cashed burden actually Mr. at more in $26Lauder hundreds on thandelivered a the deducts $27 nation’s of billion millionsin property 2014. su- in taxeson“the the nation’s on Estée pre-eminent Lauder public supportersall of offering. his holdings, of wealthying his billions spokesman take of advantage dollars said. a yearof the — system. is being that reduced his federal taxes, but said honorary chairman. He has donated tract to sell $72 million of stock to an in- borrowed 13.8can million use other shares accounting of compa- techniquesButstrictions Nobody to to regulate Pays Thatthe practice.further defer That their payment. derand has lent used artwork $72 tomillion an assortment perts worth say of his the of dealborrowedwayfrom illustrates is federal referred 13.8museums. income. howmillion to theas Soshares Parta short Mr. of of Lauder his position. compa- collection is lanthropist. ofWhether lav- or not the I.R.S.ishly agrees decorated with ceremonialearners.passion — art.armor is on for him. But tax experts say wealthy taxpayers this as a sale, it allows investors like Mr. Mr. Lauder’sthe contention public during that the his offering con- atpublishednancial Mr. $26 Lauder a planners I.R.S.tract deducts isconsider guidance legitimate, property share.it imprudent on sometaxes Selling these taxon borrow policyperelitesuch ex-ed deductionsBILL has shares CUNNINGHAM/THEall steadily of in his from this holdings,declined NEW 2006 YORK to in hisTIMES ’09,recent spokesman ac- Thethe said.arts I.R.S. and civic began causes.” cracking Mr. down Lauder on declinedpaid“There’s tofor saywith real how the truth muchtaxes to ofthe the idea less that fortu- the he did not receive tax benefits in some and lent artwork to an assortment of vestment bank in 2014 at a price of ny stock from relatives and sold them to ruling was enough to persuadeThe tax most burdennytimes.com/businessday on the nation’s su- ButofEstéemuseums. dollars tax Lauder experts in Part stock shares ofsay but his wealthyto managed collectioncarry outtaxpayers to his of side- lav-lat- Sinceentitled the to Laudersdeductishly decorated the retained $400,000 ceremonial their he pays own armorMr.“I is Lauder’s didon what contentionI wanted to thatdisplay do,” hishe atsaid. con- the Met,Mr.In in 1976, aLauder gallery at age deducts named 32, his property generous taxes dona- on can use other accounting techniques to Lauder to deferfurther paying defer taxes their for payment. years. Articlestract is in legitimate, this series some are examining tax policy ef- ex- typesforall ofprincipal his of transactionsholdings,perts shareholders say his andthespokesman inwaydeal was a company isfully illustrates referred said. re- how todecades,cording as the a shortto according aMr. report position. Lauder tothis a slivermonth declinedwealthy of by data toSena- take sayre- advantage hownythese Mr. muchstock Lauder contractsof from the system. relativessaid in his 2008, lifeand andthatwas sold hasreducedchanged them pur- to his taxnate,federal code many taxes, for who the but are 1said percent working is twodifferent jobs museums.As all art Part collectors of his may, collection Mr. Lauder of lav- the public during the offering at $26 a wealthy taxpayersshare. Sellingto abandon borrow theed THEtech- shares COLLECTOR in this canstepest state-of-the-art use paying other tens accounting of tax millions reduction techniques in federal tactic. to shares,annually the on display maneuverhis Palm at Beach the allowed Met, mansion themin a gallery as to tract“What named is I legitimate,thought was some right.” taxfor policyhim. ex- allyearstions of helpedhis because holdings, him of become thehis alternativespokesman the youngest mini-said. furtherabout 75defer percent their payment.of its current value in It was a commonThe tax tax burden reduction on strat- the nation’sfortsperts su-by say businesses the deal to illustrates lowerperelite their how taxes has the steadilyportedto borrow declined as requiredagainstwealthy in recent theirby take S.E.C. stock. advantage rules,” But it saidof re- the system.leasedtorishly Tom decorated annually Coburnthat ceremonialreducedof by Oklahoma, the his I.R.S. armor “There’sfederal who The issaid taxes, ef- onreal truth butthesued25 yearssaid publicto a the prominent agoidea during that when the casethe he offering against visitedhe did at the anot $26 kin- bil- receive a just tax to benefits make ends in somemeet, and i.o.u.’s to be ishlyis entitled decorated to deduct ceremonial the full armormarket is val- on share. Selling borrowed shares in this nique, accordingway is to referred tax lawyers to as a and short position.Mr. Lauder declined to saySince how the much LaudersfurthercapitalThese retained contracts gainsdefer theirtheir taxes emerged payment. own by using as a a hedging popular havewell asa neutral whatfor hehim.position pays onin the his stock, home not on pertsfrom the say tax the code deal for illustrates the 99As percent,” howall art the collectorsMr.mum Lauder taxmay, and Mr. declined other Lauder limits. to say how much exchangeThe tax for burden cash now. on the The nation’s transaction, su- pereliteTo celebrate has steadily the 10th declined anniversary inwealthy recent of histake Neue advantage Galerie, of decades,the Ronald system. according Lauderhis exhibited to spokesman, a sliver worksof“There’s data Gary from re- Lewi. real his truth personal to the ideacollection, fectivedisplaythat the including federal at thehe did Met, income Cénot inzannes. receive a tax gallerytax rate codetax for named benefits for the the share.lionairein 1 some percent Selling Philip is differentborrowAnschutz,ed shareswhoyears used becausein thisone ofpaid the offalternative by future mini- generations,” said trustee of the Metropolitan Museum of displayue of artworks at the Met, donated in a gallery to museums. named egyway for is referred chief executives to as a short and position. wealthy andrecords the debateat theSince Securitiesover the how Lauders to and improve Exchange retained the theirmainsthat own reduced a popular his federal way for taxes, shares, wealthy but the said tax- maneuvertechniquesomeThe wealthy allowed tax known burden taxpayers them as on to shorting the even nation’s deducted against su- subjectdergarten to in price Austria swings. and Under met a class-I.R.S. wealthysaid Victor take Fleischer, advantage a law of theis professor entitled system. to at deductthat the reduced full market his federal val- taxes, but said pereliteknown has as asteadily variable declined prepaid in forward, recent decades, according to a sliver of data re- leased annually million byIn the theory, in I.R.S. taxes.tax Mr. The code Lauder ef- for is the scheduled 1 percent to is different400toolfor him. wealthiestabout a decade taxpayers, ago and from representing were the devel- tax codewaytoPark foravoid is Avenue the referred more 99 percent,”As and than toall ashisart $140 a holdingscollectors short millionmum position. tax in inmay, and fed- the Mr.other ALauder limits.Passion for Art Art. He later served as chairman of the (For years, Mr. Lauder availed himself shareholdersSince the Lauders a decade retained ago, but their in 2006 own taxCommission.“There’s system. realshares, truth the to maneuverthe idea that allowed the thempayershe did to notto get receive cash taxout benefitsof theirhave holdingsina neutral some positionperelitethemortgage box. in has the interestyears steadilystock, becauseon not theirdeclined yachts. of thein recent alternativerulesroom mini- at full the of time,Jewish they children avoided who paying were theSenator“There’s University Coburn, real truth of a Republican, Colorado. to theue idea “Any of who that artworks tax-hasthe donated to museums. for him. decades,minimizes according potential to a lossessliver of for data share- re- leased annually by the I.R.S. The ef- fective federal incomepayEstée taxes tax Lauder onratefrom the for Companies the $72 the tax million code went when for public the the 99 percent,”theopedAs top all by 0.000258 art accountants collectors percent, andmay, fell said tax Mr.from plannersVictor Lauder about Fleischer,SinceeralHamptons. taxes.a thelaw Laudersprofessor is entitled retainedat to deduct their the ownfull market val- heCharityMuseum did not of and receive Modern Tax tax ArtBreaks benefits and remains in some an of a quirk in the tax code that allowed theshares, I.R.S. the said maneuver it appeared allowed to be theman abu- to taxAdvisers code for haveto theMr. a 1 Lauderneutral percent maintainposition is different inthat the stock,withoutyears not because selling and of the paying alternative subjecttaxes. mini-to price decades, swings.Together,And there according Under mum Mr.is no Lauder tax I.R.S.limit to and a on sliver and other the his ofamount limits. datamother re- of asrefugees much as from $95 Russia. million Still,in capital he said gains he taxpayercalledIn code the lucky for United for limits enough the States, on 1 percent taxto have breaksMr.(For appreciatedLauder is different foryears, high has Mr. Lauder availed himself As all art collectors may, Mr. Lauder leasedholders annually and gives by them the I.R.S.access Theto cash. ef- fective federal income tax rate forly $400ONLINE: the millionPrevious of that articles stock400 is in pledged wealthiest this to taxpayers,sharesinholds 1995, with are and representing said actually more Ronald Victor than delivered LauderFleischer, $1 million andin a 2014.law in his in- professor30afteriscalling entitledpercent Congress at Mr. toin Lauderdeduct1995 closed to the and18 down percentfull histhe themarket wife Universityloophole in two2008, val- of ofshares, Colorado.Whether“This thewelfare or ue maneuver “Any not of for the artworks tax- the I.R.S. allowed well-off agrees donated them— cost-with to to museums. yearshonorary because chairman. of the He alternative has donated mini- donors to take a deduction for donating sivehave taxa neutral shelter position and issued in the tighter stock, not re- hisfrom deal the “was taxsubject codemade for toin pricecompliance the 99 swings. percent,” with Undermum There I.R.S. tax is and a certain other limits. irony rulesthat Mr. at Lau- the time,leasedborrowedproperty they avoided annually taxes13.8 million paying that by the canshares I.R.S. be of deducted Thecompa- ef- taxesfound thatit odd might to be otherwisereferredCharity to have as a been phi- and Taxfrompropertyearners.focused Breaks the onis tax usually what code he put for calls to the aof choice: 99his a percent,” quirk greatest cash in the taxA code week that before allowed the opening at the is entitled to deduct the full market val- fectiveBut because federal the income I.R.S. taxdoes rate not forclassify the 400 wealthiest taxpayers, representingsecureseries: various lines of credit.the top Many 0.000258 fi- percent,Butmothercome tax claimedfell cashedexperts from in more sayabout hundreds wealthy than $27 oftaxpayers billionmillions in onue“the ofthe nation’s artworks Estée pre-eminent Lauder donated public payer to supporters museums. offering. lucky enoughof haveing to billions ahave neutral appreciated (Forof dollarsposition years, a inMr.year the Lauder — stock, is being availednot himself mumand lent tax and artwork other tolimits. an assortment of a portion of an artwork, without actu- strictionssubjectBut Nobody to to price regulate Pays swings. the That practice. Under I.R.S.That said Victor Fleischer,rules at the a law time, professor they avoided at der paying has usedthe $72 University million as worth of much Colorado. of as his $95 “Any millionfectivethenyfrom stock most tax- federal in federal fromrecent capital income.relatives incomedata gains available. So and tax Mr. sold rate Lauder them for the to is dueMr.lanthropist. had Lauder’s they sold contention their own that shares. his con- outpassionMr. and Lauder pay— art. some deducts tax, propertyor hold the taxes prop- on Neue Galerie last month, Mr. Lauder ue of artworks donated to museums. this as a sale, it allows investors like Mr. the top 0.000258 percent, fell frompublishednancial about planners I.R.S. consider guidance30 it percent onimprudent these in 1995can suchto use18 percent deductions other accounting in 2008, from 2006 techniques to ’09, to ac- The(Forthe artsyears, I.R.S. and CharityMr. began civic Lauder causes.” cracking and availedproperty Tax down Breakshimself is onusuallysubjectpaid put for to towitha choice: priceof the a quirk taxes swings.cash in of thethe Under A taxless week code I.R.S.fortu- before that said allowed the Victor opening Fleischer, at the a lawdonors professor to take at a deductionmuseums. for Part donating of his collection of lav- ally turning over the art. That break, 400 wealthiest taxpayers, representing rulingrules at was the enough time, they to avoidedpersuade paying most nytimes.com/businessdaythe Universityas much of Colorado. as $95 million “Any in tax- capitalEstéeof gainsdollars Lauder inpayer stock shares lucky but to managed carryenoughtaxes out to to thathis have side- lat- might appreciated400theentitled otherwiseWhen publicwealthiest toMr. duringdeduct haveLauder taxpayers, been the ran offering$400,000 unsuccessfully representing athe $26pays a tract“I did is legitimate,what I wanted some to tax do,” policy he said. ex- ertyallIn of and 1976,his riskholdings, at agethe vagaries32, his his spokesman generous of the market. dona- said. appeared at another gala, 40 blocks (For years, Mr. Lauder availed himself Lauder to defer paying taxes for years. Articles in this30 percent series are in 1995examining to 18 percent ef- typesinfor 2008, principal of transactions shareholders and the wasin amost company fully recent re- datafurtherCharitycording available. defer to and a theirreport Tax payment. thisBreaks month by Sena- theseof aMr. quirk contractsLauder in the said in tax 2008,his code life and thatwas has allowedchanged pur- rulesnate,Such atmany transactions thedonors who time, are theyto allowedtake working avoided Neuea deduction investors two payingGalerie jobs for last donatingthe month, University Mr. Lauder of Colorado.a portion “Any tax- of an artwork,ishly decorated without ceremonial actu- armor is on known as fractional donation, was elim- the top 0.000258 percent, fell from about wealthy taxpayers to abandon the tech- payer luckytaxes enough that to have might appreciated otherwise haveeststep beenstate-of-the-art payingproperty tens of tax is millions usuallyreductiondue in hadput federaltactic. theyto a choice: soldtheforshare.annually their cashthetop own SellingRepublican0.000258 on shares. hisA borrow Palmpercent, week nomination Beach ed before fell sharesout mansionfrom and thefor in aboutmay-pay opening this as someperts“What attax, the or say I thoughthold the the deal was prop- illustrates right.” how the OnlyMr.tions Lauder the helped truly declined him rich become can to use say the derivatives how youngest much south,Charity at the and New Tax York Breaks Public Library, of a quirk in the tax code that allowed It was a common tax reduction strat- asforts much by businessesasthe $95 most million to recent lower in capital data their available. taxes gains portedto borrow as required against bytheir S.E.C. stock. Whenrules,” But Mr. saidit re- Laudertor ran Tom unsuccessfully Coburn of Oklahoma, who said sueddonors25 years a to prominent take ago a whendeduction case he against visited for donating the a bil- kin- astojust cashmuch to make inas their a $95 ends portion million shareholdings meet, of inand an capital artwork,i.o.u.’s without gains to be withoutpayer actu- lucky enough to haveally appreciated turning overdisplay the art. at Thatthe Met, break, in a gallery named inated in 2006.) The tax code also allows 30 percent in 1995 to 18 percent in 2008, nique, according to tax lawyers and property is usuallydue had put they to sold a choice: their own cash shares.ThesecapitalTheA week contracts tax gains burdenout before taxes and emerged the onpay by theusing openingsome as nation’sSuch a atax, hedging popular at or transactions thesu-hold the30orwell prop-ofpercent allowed asNew what YorkinNeue investors1995 he and pays Galerieto released 18 onpercent erty last his his homeand month,in tax 2008, risk re- on Mr.the vagarieswealthy Lauder take of the advantage market. of theappeared system. at anothertothattrustee get reduced the gala, of bestthe 40his Metropolitan of blocksfederal both worlds taxes, Museum — but lots said ofof to receive the Carnegie Foundation’s donors to take a deduction for donating egy for chief executives and wealthy taxes that might otherwise have been hismains spokesman, a popular Gary way Lewi. forfor wealthy the Republican tax- some nomination wealthy for taxpayers may- even deducted waylionairea portion is referredPhilip of an Anschutz, artwork,to as a short who without used position. actu- one taxespayingpaid off that taxes. by mightally future But turning otherwise the generations,” Lauders’ over have the use art.been said of Thatproperty break, is usually put to aknown choice: as cash fractionalforA him.donation, week before was elim- the opening at the artwork in offices to be deducted as a the most recent data available. recordsand the at debate theWhen Securities over Mr.how Lauder toand improve Exchange ran theunsuccessfullyout and pay some tax, or hold the prop- perelitetooltechniqueNeue about Galerie has a knownerty decadesteadily last and asago month,risk declined shorting and theto Mr.were vagaries cash in againstLauder recentdevel- in of their the turnPark shareholdingsmarket.dergarten to Avenue the public, appeared in andAustria without he his reported at and holdings anotherOnly met paying the a in gala,class- truly the 30 40rich blocks “There’scan use realderivatives truth to thesouth, idea that at thethe Newcashhe York did and notPublic very receive littleLibrary, taxrisk.” benefits in some Medal of Philanthropy. a portion of an artwork, without actu- due had they sold their own shares. millionIn theory, in taxes. Mr.Such Lauder transactions isor scheduled of New allowed York to investorsand released his tax re- theSincetoally avoid most turning the recent more Lauders over than data the retained $140available. art. million That their in break, own fed- theASenator Passion technique Coburn,known for was a Art asRepublican, so fractional aggressive whodonation, thathas wasoutArt. elim- and He paylater some served tax, as or chairman holdinated the in ofprop- 2006.) the TheNeueAs tax all Galeriecode art alsocollectors last allows month, may, Mr.Mr. Lauder shareholdersWhen Mr. Lauder a decade ran ago,unsuccessfully but in 2006 Commission.tax system.for the Republican nomination forertypayers may- and torisk get the cash vagaries out of of their the market.holdings decades,opedtheappearedmortgage box. by according accountants atinterestOnly another the toon truly a andtheir sliver gala, payingrich tax yachts. of 40 planners candata blocks taxes. use re- derivatives Butpercentroom the Lauders’ full in oftotalsouth, Jewish use federal, at ofthe children New stateto get York who and the werecity Publicbest of Library,duetax both had code worlds they for sold the— lots their 1 percent of ownto shares. is receive different the Carnegieyears because Foundation’s of the alternative mini- allybusiness turning expense. over the art. That break, Such transactions allowed investors payEstée taxes Lauder onto the cash Companies $72 in million their went shareholdings when public the without shares,Hamptons.eralWhen taxes. theMr. maneuverLauder ran allowed unsuccessfully them to Congress enactedinated ina law2006.) afterward The tax codethat alsoertyMuseum allowsWhile and Mr.risk of Modern Lauder’sthe vagaries Art stock and ofartwork theholdingsremains market. in anin officesappearedis toTheentitled be program deducted to at deduct another honored as the a gala, full peoplemarket 40 blocks whoval- forthe the I.R.S. Republican said it appeared nomination to be for an may- abu- Advisers orto Mr.of New Lauder York maintain and released that his withouttax re- selling and payingturn taxes. to the public,leased heTogether,And reported annuallythereto Mr. paying isget no Lauder bythe limit 30 the best on and I.R.S. ofthe hisboth amount Themother worlds ef- of —taxesknown refugeeslots onof as about fractional fromto receive $30 Russia. million donation, the Still,cash in Carnegie income hewas and said elim- very in Foundation’she littlefromcalled Suchrisk.”In the the for transactions United tax limits code States, on for tax allowed theMr. breaksMedal 99Lauder investors percent,” for of highPhilanthropy.has knownUnlike as somefractional wealthy donation, collectors was elim- who to cashONLINE: in theirPrevious shareholdings articles in without this insharesOnly 1995, the are andtruly paying actually Ronaldrich taxes.can delivered Lauder use But derivatives the and in Lauders’2014. his aftersouth, use Congress ofat the New closed York down Publicthe the technique loopholeLibrary, wasforhave “This sothe a aggressiveneutralRepublican welfare position for thatnomination the inwell-off the stock, for — may-cost- not limited the artwork length of in the offices tax to deferral. be deductedOnlypubliclymumhonorary as thetax a tradedand truly chairman. other rich companies limits.can He use business has showderivatives donated some expense.south,have givenat the profuselyNew York to Public charities, Library, in- orsive of New tax shelterYork and and released issued his tighter tax re- re- turn to the public, he reported payingThere 30 is a certain ironypercent that Mr. in Lau- total fective federal,borrowedproperty federal state 13.8 taxescash and million income and that city very shares can tax little rate be of risk.” deductedcompa- for the 1988.inatedfoundWhether At in itthe 2006.)odd Medalortime, tonot The behis theof tax referredPhilanthropy.net I.R.S. code worth agrees Whilealsoto was as allows aMr.esti-with phi- Lauder’stofocusedearners. cash stock in on theirholdings what shareholdings he in calls hisThe greatest without program honored people who ue of artworks donated to museums. inatedare criticized in 2006.) for The using tax tax code breaks also allows to un- hispaying dealseries: taxes.“was made But the in compliance Lauders’ use with of Butto get tax the experts bestthe of techniquesay both wealthy worlds was taxpayers — so lots aggressive of onto receive thethat Estée the Lauder Carnegie public Congress Foundation’s offering. enactedorsubjecting a of lawbillions New afterward to York priceof dollars and swings.that released a year Under —his is tax being I.R.S. re- Andsaid theVictor Lauders Fleischer, eventually a law professorpaid tens atof toofand hisget lent tactics, the artworkbest much of both toof his an worlds wealth assortmentUnlike — is lots hard- some of wealthytocluding receive collectors Mr. the Lauder’s Carnegie who brother Foundation’s Leonard turnstrictions to the public,to regulate he reported the practice. paying That 30 percent in total federal, state andmotherder city has cashed used $72in hundreds milliontaxes worth of millionson ofabout his $30400nyfrom millionstock wealthiest federal from in income relatives income. taxpayers, in Soand Mr.representing sold Lauder them to is matedMr.artworklanthropist. Lauder’s at in nearly offices contention a to quarter be deducted thatpublicly of a his billion tradedas con- a companiespayingpassionMr. Lauder taxes.— art. showbusiness deducts But some the expense. property Lauders’have taxes given use on of profusely to charities, in- (For years, Mr. Lauder availed himself derwrite private collections that offer publishedthe technique I.R.S. was guidance so aggressive on these that cancash use and other veryCongress littleaccounting risk.” enacted techniques a law afterward to TheMedal that I.R.S. of Philanthropy. beganWhile crackingMr. Lauder’slimited down stock the on length holdingsturnrulespaid of to for theatin the withthe tax public, time, theThe deferral. taxes he they program reported of avoided the honored lesspaying paying fortu- 30 peoplemillionsthe who University in stock offrom Colorado. the transaction. “Any tax- casherCharitymuseums. to andexamine very and Part becauselittle Tax of hisrisk.” Breaks it collection is arecontrolled criticized of lav- by for Medalandusing his tax of wife, Philanthropy. breaks Evelyn to un- (who died Nov. 12), artwork in offices to be deducted as a percentruling was in total enough federal, to persuadestate and mostcity nytimes.com/businessdaytaxes on about $30 million in incomeofEstée dollars in Lauder in stock shares but tomanaged carry1988. out At to his theside- lat- time, thehisentitled topnet public 0.000258worth to during deduct was percent, esti- the the offering $400,000 fell from at he about $26 pays a dollars.tractbusiness“I isdid legitimate, expense. what I wanted some to taxof do,”his policy tactics, he said. ex- muchtheall Inof of technique his1976, his wealth holdings, at ageUnlike wasis 32,hard- his sohis some spokesman aggressivegenerouscluding wealthy dona- Mr.said. that collectors Lauder’s who brother Leonard of a quirk in the tax code that allowed little access to the public, Mr. Lauder is typesCongress of transactions enacted a law and afterward was fully that re- furtherWhile defer Mr.limited Lauder’stheir payment. the stock length holdings of the in tax deferral.theseThe contracts programpublicly in honored 2008, traded andAnd people companies hasthe Lauders pur-who show percentasnate,eventually somemuch many inas paid totalhave$95 who tens million federal, aregiven of working in profusely state capital twoand gains to jobs city charities,payerStill, in- lucky the family’s enough tax to have planning appreciated was ef- aishly maze decorated of privately ceremonial held trustsderwrite armor and com-is private on whose collections causes that include offer the Whitney Mu- business expense. taxeswealthy on abouttaxpayers $30 millionto abandon in income the tech- in 1988. At the time, his net worth wasstepest esti- state-of-the-art paying tens of tax millions reductionmated in federal at tactic. nearly 30share. aannually percent quarter Selling on in of his1995 aborrow billionPalm to 18 edBeach percent shares mansion in in 2008, this as perts“WhatUnlike say I thought some the deal wealthy was illustrates right.” collectorser to howexamine who the becauseCongresstionsMr. Lauder it helped is controlledenactedare declined him criticized becomea bylaw to sayafterwardfor and the using how youngesthis wife, muchtax that breaks Evelyn Whileto (who un- Mr. died Lauder’s Nov. 12), stock holdings in donorsThe to program take a deduction honored for people donating who widely praised for making his artwork a portedlimited as the required length by of S.E.C. the tax rules,” deferral. said publicly tradedAnd the companies Lauders showeventually some paidsuedhave tens aof given prominentof profusely his tactics, case to againstmuch millions charities, of the his in bil-wealthstock in- fromtaxes justis Mr.hard- to the on Lauder’sthatmake transaction. about mightcluding ends $30more meet, otherwise million Mr. recent and Lauder’s in i.o.u.’stax haveincome returns brother beento bein Leonardfectiveproperty enough is usually that put after to aEstée choice: Lauder cash panies.displayA week Court at the before documents, Met, the in a opening gallery S.E.C. namedat filings the seum and the pink ribbon campaign for Unlike some wealthy collectors who nique, according to tax lawyers and mated at nearly a quarter of acapital These billionThe tax gains contracts burden taxes emerged onby usingthedollars. nation’sas a a hedging popular su- thewell most as recent what hedata pays available. on his home on wealthyare criticized take advantagefor using tax of thebreaks system. to un- limitedtrusteethat reduced of the the derwrite length his Metropolitan federal of private the taxes, tax Museum collections deferral.but said of thatpublicly offer traded companieslittle show access some to thehavea public, portion given Mr. of profuselyLauder an artwork, is to without charities, actu- in- community asset. 1988. At the time, his net worth was esti- hisAnd spokesman, the Lauders Gary eventually Lewi. paid tens of of his tactics,millions much of in his stock wealth from is the hard- transaction.lionairewaycluding is referredPhilip Mr.er Lauder’s to Anschutz, examine to as brothera shortwhobecauseStill, used position.Leonard the it isone family’s controlled1988.remainduepaid tax had Atby offplanning private, thethey by andtime, sold future wasandhis histheir wife, heef- net generations,” declinedown worthEvelyna shares.maze was to (who ofmake esti- saidprivately died Nov.out held and 12), trusts pay some and com-tax, or holdwhose the causes prop- includeandNeuefor him. property the Galerie Whitney tax last records Mu- month, spotlight Mr. Lauder a few breast cancer awareness. are criticized for using tax breaks to un- records at the Securities and Exchange dollars. techniqueperelitetool about has knowna steadilydecade as ago declined shorting andMr. were in against Lauder’srecent devel- moreParkWhen recent Avenue Mr. tax Lauder returns and hisran holdingsunsuccessfully in the derwrite“There’s private real truth collections to the idea that that offer the Anddiedhe did thein not2004, Lauders receivelittle she accesspassedeventually tax benefits todown the paid public,nearly in tens some $4Mr.of Lauderof his tactics,is much of his wealthwidely is praised hard- forcludingally making turning Mr. his Lauder’sartwork over the a brother art. That Leonard break, The Neue Galerie, created by Mr. mated at nearly a quarter of a billion millionIn theory, in taxes. Mr. Lauder is scheduled to er to examine Still,because the family’sit is controlled tax planning by toSinceand was avoid his ef- the wife, more Laudersa Evelynmaze than of retained $140(who privately million fectivedied their heldNov. inenough owntrusts fed-12), thatandmatedthemSenatorASuch com-afterPassion available at transactionsCoburn,Estée nearlywhose for forLauder aa thiscauses ArtRepublican, quarter allowed article. includepanies. of investors awho billionthe Court has Whitney documents,ertyArt. Mu- andHe later risk S.E.C. theserved filingsvagaries as chairman ofseum the market.and of thethe pinkofappeared ribbontheAs allmore art campaign at ordinary collectors another for tax may, gala, breaks Mr. 40 usedLauder blocks by Ronald Lauder and his wife, Jo Car- derwrite private collections that offer Commission. millions in stockMr. from Lauder’s the transaction. more recent tax thedecades,returnsoped box. by according accountants to a andsliverremain tax of plannersdata private, re- and he declined to make taxlittle code access for to the the 1 public, percent Mr. is Lauder different is millionsbillionyears becauseto in her stockwidely heirs, of from thepraised according the alternative transaction. for makingto tax mini- ex- his artworker to examine a because it is communitycontrolled by asset.andknown his aswife, fractional Evelyn donation,(who died was Nov. elim- 12), Lauder and Serge Sabarsky, who died in dollars. payEstée taxes Lauder on the Companies $72 million went when public the a maze of privatelyfective enoughheld trusts that and after com- Estée foreralshares,whoseLauderHamptons. the taxes. causesRepublican the panies. maneuver include nomination Court the allowed documents,diedWhitney forin them 2004, may- Mu- to S.E.C. she dollars.passed filings downseum nearly and $4 the pinkand propertyribbon campaign tax OnlyMuseumrecords forthe spotlight oftruly Modern rich a few canArt andusebreast derivativesremains cancer an awareness.affluentsouth,is entitled at people. the to deductNew York the fullPublic market Library, val- little access to the public, Mr. Lauder is Advisers to Mr. Lauder maintain that Still, the family’s tax planning was ef- leasedTogether, annually Mr. Lauder by the and I.R.S.them his available Themother ef- for this article. tocalledfromwidely cashIn thethe forpraised in taxUnited limits their code for on shareholdingsStates, making for tax the breaks Mr. his 99 Lauder artwork percent,” for without high has a pertsStill, who the studiedfamily’scommunity the tax case planningasset. and estimat- was ef- a maze of privately held trustsThe and Neue com- Galerie,whoseole,inated were createdincauses 2006.)honored include byThe for Mr.tax a the variety code Whitney also of contri-allows Mu- 1996, in a mansion once owned by Cor- Mr. Lauder’s more recent tax returns sharesin 1995, are and remain actually Ronald private, delivered Lauder and he in and declined 2014. his topanies.after make Congress Court documents, closed down S.E.C. the loophole filings orhaveseum of“This New aand neutral welfare theYorkand pink position propertyand for ribbon released the in taxwell-off thebillioncampaign records his stock, taxto— her cost- notspotlightre-for heirs, aaccording few breast to tax cancer ex- awareness.of the more ordinarytohonorarymum get tax tax the breaks and best chairman. other usedof both limits. by Heworlds hasRonald — donated lots Lauder of to and receive his wife, the Jo Carnegie Car- Foundation’s widely praised for making his artwork a fective enough that after Estée Lauder borrowedfective federal 13.8died million income in 2004, shares taxshe ratepassed of compa- for down the nearlyWhether $4 or not the I.R.S. agrees with Thepayingearners.saidfocusedMr. VictorFamily Lauder’s taxes. on Fleischer, what Fortune But more the he recent a calls Lauders’law professor tax his returns greatest use ofat ed that the estateThe Neue was taxed Galerie, at an created ef- panies.ue bySignificant of Mr. artworks Court portions documents, donated of Lauder tohis S.E.C. museums. inherited filingsand Sergeseumbutions:artwork Sabarsky, and inthe the who offices work pink died of toribbon in their be deducted campaignjoint founda- as for a remainhis deal private, “was madeand he in declined compliance to make with But tax expertsthem sayavailable wealthy for taxpayersthis article. on the Estée Lauder public offering. turnsubjecting tobillions the to public,of price of the dollars more swings.he reported aordinary year perts Under paying— who taxis I.R.S. being breaks studied 30 communityused the caseby and asset.Ronald estimat- Lauderaffluent and hispeople. wife, fectivecashand Jo Car- lentand enough very artwork little that torisk.” after an assortmentEstéeole, were Lauder honored of Medal for a variety of Philanthropy. of contri- communitynelia Vanderbilt, asset. offers public viewing diedmother in 2004, cashed she passed in hundreds down ofnearly millions $4 ny400and stock wealthiestproperty frombillion tax relatives taxpayers, records to her and heirs,spotlight representingsold according them a few to toMr.breast tax Lauder’sex- cancer awareness. contention that his con- remainthepassionMr. technique Lauder private, — art. deducts wasand he so property declined aggressive taxesto make that on fective rate ofLauder 16 percent and Serge — about Sabarsky, a third whoandstock(For died property years, arein held Mr. tax in Lauder familyrecords trusts, availed spotlight1996, which inhimself a few mansionre- breasttionbusiness once supporting cancer owned expense. awareness. by hospitals,Cor- rebuilding thempublished available I.R.S. for this guidance article. on these can use other accounting techniques to The I.R.S. began crackingThe downFamily on Fortunepercentrulespaid atfor in thewith totalaffluent time, the federal, taxes they people. avoidedof state edthe that less and paying the fortu- city estatethe Mr.The was University Lauder, taxed Neue at Galerie, now of an Colorado. 67,ef- wascreated bornSignificant “Any by into tax- Mr. a portionsdiedmuseums.CharityWhile in of2004, Mr. his and Part sheLauder’s inherited Tax ofpassed his Breaks stock collection downbutions: holdings nearly of the lav- $4in work ofThe their program joint founda- honored people who of The an exquisite Neue Galerie, collection, created worth by more Mr. billionof dollars to her in heirs,stock butaccording managed to taxto side-ex- theof the top public more 0.000258 during pertsordinary percent, who the tax studied offering breaksfell from the atused caseabout $26 by aand estimat-tractRonald is legitimate, Lauder and some his tax wife, policy Jo Car- ex- themCongressall ofIn availablehis1976, holdings,enacted atole, age for were this32, ahis lawhonored his article.spokesman afterwardgenerous for a variety said.dona-that ofof contri- the top estate1996, tax in arate mansion at the time.once owned ofduceby the aCor- quirkthe more ultimate inordinary the estate tax tax code tax.breaksnelia that Mr. used allowedVanderbilt,Lauder by monuments offers public and viewing refurbishing American types of transactions and was fully re- these contracts in 2008, and has pur- taxesasnate, much on many aboutas $95 who $30 million aremillion working in capitalin income two gains jobs in storiedpayerLauder lucky and American Sergeenough Sabarsky, fortune. to havestock Hisappreciated who mother,are died held in in familybillionishly decorated trusts,to her heirs,which ceremonial accordingre- tion armor to supportingtax is ex- on hospitals, rebuilding RonaldUnlike some Lauder wealthy and his collectors wife, Jo Car-who Lauderthan $200 and million Serge evenSabarsky, before who Mr. died Lau- in furtherpertsstep who paying defer studiedThe their tens Family payment.the of millionscase Fortune and inestimat- federal 30affluent percent people. ined 1995 that to the 18 percent estateMr. was in Lauder, 2008, taxed now atpertsole, an 67, were ef- saywas honored the bornSignificant deal into for illustrates a variety portionsfective of how contri-rate of the of his 16 inheritedpercentlimitedMr.tions Lauder helped — the about butions: length declined him a third become of the to the work say tax the how of deferral. youngest their much joint publiclyfounda-Ronald traded Lauder companies has not show been somea di- andhavedonors his given towife take profuselyhave a deduction also established to of charities, for an donating exquisite their in- collection,embassies worth around more the world — more ported as required by S.E.C. rules,” said share.sued a Selling prominent borrow caseed againstshares in the this bil- 1988.taxesjust Atto that makethe mighttime, ends his otherwise meet, net worth and havei.o.u.’s was beenesti- to be Estéeproperty1996, in Lauder, a is mansion usually the daughterputonce to owned aduce choice: of theEasternby cashultimateCor- pertsdisplay estateA weekwho tax. at studied theMr.nelia before Met,Lauder Vanderbilt, the the in case a opening gallery and offers estimat- named at public the affluent viewing people. ole,are criticizedwere honored for using for a taxvariety breaks of contri- to un- der added dozens of pieces for its 10th The Family Fortune edcapitalThe that tax the gains burden estate taxes was on by the taxedusing nation’s aat hedging an su- ef- theSignificant most recentfective portions data rate available. of of 16storied his percent inherited American — aboutwealthybutions: a fortune. third takethe Hisstock workadvantage mother, are of heldtheir of in ofthejoint familythe system. founda-top trusts, estate which taxAndthat rate the reducedre- at Lauders thetion time.his eventually supportingfederal taxes, paid hospitals, but tens said of rebuildingrectorof his tactics, of the company much of his since wealthmonuments 2009, is but hard- he and refurbishingowncludinga portion family Mr. of trusts, Lauder’sAmerican an artwork, allowing brother withoutthan them Leonard$200 to actu- be-millionthan even a before quarter Mr. of Lau- a billion dollars over 1996, in a mansion once owned by Cor- his spokesman, Gary Lewi. Mr. Lauder, now 67, was bornwaylionaire into is a referred Philip Anschutz, to as a short who position.used one matedduepaid had off at they nearly by sold future atheir quarter generations,” own shares. of a billion said EuropeanTheoutneliatrustee and Family Vanderbilt, payof immigrants,the some Fortune Metropolitan offerstax, or public beganhold Museum the viewing selling prop- of edforNeue thathim. Galerie the of estate an last exquisite was month, taxed Mr.collection, at Lauder an ef- worth Significant more portions of his inherited butions:derwrite the private work collectionsof their joint that founda- offer anniversary. perelitefectivetechnique rate has of knownsteadily 16 percent as declined shorting — about in arecent against third stock are heldof thein family top estate trusts, tax which rate at re- the time.tion“There’s supporting realduce truth the hospitals, ultimate to the idea Ronald estate rebuilding that tax. the Lauder Mr.millionshe Lauder hasdid not in stockreceive beenmonuments from a tax di- the benefits and transaction.and refurbishing his in wifesome have Americanstiller also to servesexamine established as because the their president it is embassiescontrolled of its Cli- by aroundqueathandally the his turning world theirwife, Evelyn wealthover — more the (who to art. their died That heirs Nov. break, with 12), the last five years, according to his nelia Vanderbilt, offers public viewing Mr.In theory, Lauder, Mr. now Lauder 67, was is scheduled born into ato storied American fortune. His Since mother,toWhen avoid the Mr. more Lauders Lauder than retained ran $140 unsuccessfully Estée million their Lauder, in own fed- thedollars. daughter of Eastern homemadeertyofArt. an and He exquisite risklater beauty the served collection,vagaries creams as chairman of at worththe a few market. moreNewof the fectiveappearedAs all rate art at ofthan collectors 16 another percent$200 millionmay, gala, — about Mr. even 40 Lauder a blocks thirdbefore Mr.stock Lau- are held in family trusts,der which added re- dozenstionlittle of piecesaccess supporting forto the its hospitals, 10thpublic, Mr. rebuildingLauder is Sheldon Cohen, a former I.R.S. com- decades,the box. according to a sliver of data re- duce the ultimateRonald estate Lauder tax. Mr. has Lauder not beentaxmonumentsSenator Such a code di- transactions Coburn, forand and the his refurbishing 1a wife percentRepublican, allowed haverector is alsoAmerican investors different whoof established the has companyMr.Still, their since Lauder,the family’s2009,embassies now but tax 67,he aroundplanningwasown born family the was into world ef- trusts, a —a mazeallowing more of privately them to heldbe- truststhan and a quarter com- ofminimalwhoseknown a billion causesas taxes. fractional dollars include over donation, the Whitney was elim- Mu- spokesman. of an exquisite collection, worth more storiedpay taxes American on the fortune. $72 million His when mother, the of the top estateEstée tax Lauder, rate at thethe time. daughter of Easternshares,foreral the taxes. Republican the maneuver nomination allowedEuropean for them may- toimmigrants, began selling YorkyearsOnlythanMuseum $200 Citythe because truly of hairmillion Modern rich salonsof even the can Art alternativein beforeuse and the derivatives remains 1940s Mr. mini- Lau- and an ofniquesouth, the topLaboratories at estatetheder New addedtax York subdivision.rate dozens atPublic the time. of Library,He pieces also for duce its 10th the ultimate estate tax.anniversary. Mr. Lauder monumentswidely praised and for refurbishing making his Americanartwork a missioner, said that when used as in- leasedTogether, annually Mr. byLauder the I.R.S.and his The mother ef- and his wiferector have ofalso the established company since their 2009,fromtoembassiescalled but Mr. cash he theLauder’s for in tax theirlimitsown around code more family shareholdings on for the taxrecent thetrusts, world breaksstill 99 tax allowing percent,” serves — withoutreturns for more high as them thestoried to president be- Americanthan of its a fortune. quarter Cli- queath ofHis a mother,billion their dollars wealthpanies.is entitled over to their Court to heirsdeduct documents, with the full the S.E.C. market last filings val- five years,seuminated accordingand in 2006.) the pink The to ribbon histax code campaign also allows for than $200 million even before Mr. Lau- Estéeshares Lauder, are actually the daughter delivered of Eastern in 2014. Ronald LauderEuropean has immigrants, not been a began di- haveor selling of Newa neutral York position and released in thehomemade hisstock, tax notre- beauty creams at a few New builtfectivemumtoderhonorary get addedher tax theenough productand best dozens chairman. other ofthat line both oflimits. after into pieces worlds He aEstée multibillion- has for — Lauder its donatedlots 10th of subletsto Ronald receive a full Lauderanniversary. the floor Carnegie has of office not Foundation’s spacebeen a from di- andOther his wifetrusts have and also partnerships establishedSheldon control their Cohen,embassiescommunity aThe former Ronald aroundI.R.S.asset. S. Lauder com- the Foundation world — more has tended, the tax code’s breaks for art col- fectiveborrowed federal 13.8 incomemillion shares tax rate of forcompa- the ownWhether family stilltrusts, or not serves allowingthe I.R.S. as the them agrees president to withbe- ofremainsaidpayingthan itsearners. Cli-Victor a quarterprivate, taxes. Fleischer,queath But and of a theirthe he billion a declined Lauders’law wealthnique dollarsprofessor to toLaboratories usemake overtheir at of heirsEstée subdivision. with Lauder,the theHe last also daughter five years,minimal of Eastern according taxes. andue to ofproperty his artworks tax donatedrecords spotlight tospokesman. museums. a few breastartwork cancer in offices awareness. to be deducted as a der added dozens of pieces for its 10th EuropeanBut tax experts immigrants, say wealthy began taxpayers selling rector of thehomemade company since beauty 2009, creams but he at a fewsubjectturn New to the to public, price swings.he reported York Under paying City I.R.S. hair30 salons in the 1940s and dollardiedcashanniversary.and inand lentglobal 2004, very artwork empire.she little passed risk.” to an down assortment nearly $4 of rectorEstéeMedal Lauder,ofof thePhilanthropy. companySheldon on the 42ndsince Cohen, story2009, a former butof the he I.R.S.ownhis com-real family estate trusts, properties allowing inmissioner, Palmthem Beachto be- said thatthandonatedThe when a quarterNeue tens used of Galerie, ofmillions as a in- billion created of dollars dollars by to over Mr.re- lectors balance private interests with 400ny stock wealthiest from relatives taxpayers, and representing sold them to queathMr. Lauder’s theirnique wealth contention Laboratories to their that heirs subdivision. his with con- themtheHe Mr.also Universitytechnique last available Lauder fiveminimal years,fordeducts was of this Colorado. taxes. so accordingarticle. property aggressive sublets “Any taxes to a thattax- full his on floorEuropeanbillion of office to her spaceimmigrants,spokesman. heirs, from according beganOther to tax selling trusts ex- andof(For partnershipsthe years, more ordinaryMr. controlLauder tax availedbreaksThe usedhimself Ronald by S. LauderbusinessRonald Foundation expense. Lauder and has his wife, Jo Car- anniversary. homemadecan use other beauty accounting creams attechniques a few New to still serves York as the City president hair salons of its in Cli- the 1940srulespercent and at inthe total time, federal, they avoided statebuilt andher paying product city line into a multibillion- Charitymuseums.AsWhileSheldon the Mr. sonand Cohen, PartLauder’s ofTax of a a hisfabulouslyBreaks former stock collection I.R.S.holdings wealthy of com- lav-in stillGeneralThe serves program Motors missioner, as the Building honored president said in people thatManhattan, of its when who Cli- usedqueathand as the in- theirHamptons wealth and to at their 740tended, heirsPark the Ave- with tax code’sthebuildLauder last breaks Jewish and five Sergefor communities years, art Sabarsky, col- according who devastated died to his in the public good. thethe top public 0.000258 during percent, the offering fell from at about $26 a minimaltract is taxes. legitimate,sublets a some full floor tax policyof office ex- spacepayerCongressall from of luckyhis enactedholdings, enoughOther a totrustshislaw have spokesman afterward Estéeand appreciated partnerships Lauder, thatsaid. onhomemadeperts controlthe 42ndwho studiedstory beautyThe of Ronald the creamsthe case S. his atand Lauder a real few estimat- estate New Foundation propertiesaffluentof a has quirk people.in Palm in the Beach tax code donated that allowed tens of millionsole,Unlike were of honored somedollars wealthy to for re- a variety collectors of contri- who Sheldon Cohen, a former I.R.S. com- Yorkfurther City defer hair their salons payment. in the 1940s and nique Laboratoriesbuilt her subdivision. product line He into also a multibillion-astaxes much on aboutas $95 $30 million million in dollar capitalin income global gains in empire.spokesman. fashionpubliclymissioner,ishly decorated icon,traded said Mr. thatcompaniesceremonial Lauder when usedshow armor developed as some is in- on niquewhichhave Laboratories givenservestended, profusely as the thesubdivision. hub tax to for charities,code’s the He matrix breaks also in- forminimalnue, art col- a building taxes. that was oncelectors home balance to privatespokesman.by1996, the in Holocausta interests mansion withand once communist owned by rule.Cor- “If an art collector makes significant 30share. percent Selling in 1995 borrow to 18 edpercent shares in in2008, this pertsOther say trusts Estée the and deal Lauder, partnerships illustrates on the howcontrol 42nd the storyThepropertylimitedMr. of theFamily Lauder the is usuallyhis length declinedFortune real putestate of theto asay propertiesGeneral taxchoice: how deferral. Motorscash much in Palm BuildingYorked BeachA that week City thein hairManhattan, donated before estate salons wasthe tens in opening taxed of theand millions 1940s the at at an Hamptons andof the ef- dollarsdonors andSignificantto re- at to 740 take Park portions a deduction Ave- of build his for inheriteddonating Jewish communitiesbutions:are criticized the devastated work for using of their tax breaksjoint founda- to un- missioner, said that when used as in- builtThe her taxproduct burden line oninto the a multibillion- nation’s su- sublets a fulldollar floor global of office empire. space from taxes1988. At that the mighttime, his otherwise net worth As have was the beenesti- son of a The fabulously Ronald S. wealthy Lauder Foundation has aristocraticoftended,display his tactics, the at tax thetastes much code’s Met, — of inand hisbreaks a wealth grand gallery for isaspira-art namedhard- col- subletsofcluding foundations, a Mr. fulllectors Lauder’s floor investment of balance office brother funds,space private Leonard part-from interestsJohnOther with D. trusts Rockefeller, and partnerships and the is knownpublic control good. as Mr.neliaThe Lauder Vanderbilt,Ronald has S. also Lauder offers given Foundation public to a variety viewing has of contributions, and the public actually theway most is referredrecent data to available. as a short position. wealthy takeGeneral advantage Motors of theBuilding system. in Manhattan,Andthat the reduced Laudersand his the eventually federal Hamptons taxes,which paid and butservestens at said 740of as Park builttheNeue Ave-hub her Galerie forproduct buildthe last matrix line Jewish month, into a communitiesnue, multibillion- Mr. a Lauder building devastated thatstocka portion was are once held of an in home artwork,family to trusts, withoutby thewhich Holocaust actu- re- tionderwrite and supporting communist private hospitals,rule.collections rebuilding that offer tended, the tax code’s breaks for art col- dollarperelite global has empire. steadily declined in recent Estée Lauder,As on thethe son42nd of story a fabulously of the wealthyduematedhis real had at estatethey nearly sold properties their a quarter own infashion shares.Palm of a Beach billion icon, Mr.outdonated Mr. Lauderand Lauder, paytens developedsome of now millions tax, 67, or was of hold dollars born the intoprop-to re- a fectivelectorsfor him. rate balance of 16 percent private — interests about a third with Estéenerships Lauder, andthe trusts onpublic the used good.42nd to story control of thehis hisone real of the estate world’s properties wealthiest in Palm “Ifapartment an Beach art collectordonatedJewishof an makes exquisite andtens significant of Israeli millions collection, organizations, of dollars worth to more re- in- SinceWhen the Mr. Lauders Lauder ran retained unsuccessfully their own “There’s real truth to the idea that the millionshe did notin stock nue,receive from a building tax the benefits transaction.of that foundations, wasin some once investment homedollartionser to examine— toglobal at funds,an empire. becauseearly part- age. it isHe Johncontrolled summered D. Rockefeller, by duceallyand his turning andthe wife, ultimate is knownEvelyn over estate the as(who art. tax. Mr.died That Mr. Lauder Nov. Lauder break, 12), has also given to a variety of lectorsgets access balance to the private works they interests are donat- with General Motorsfashion Building icon, in Mr. Manhattan, Lauder developeddollars.andSuch the Hamptons transactionswhich serves and allowed at as740aristocratic the Park investors hub Ave- for tastes theertybuild matrix— and Jewish riskgrand the communities aspira- vagaries of the devastated market. ofappeared theAs top all estateart atby collectors another the tax Holocaustrate gala, may,at the Mr. 40 andtime. blocksLauder communist businesses rule. and“If personal an art collectorfinances. makes significantandbuildings.monumentslittle the access Hamptons toand the refurbishing public,and at 740Mr.contributions, ParkAmericanLauder Ave- is andcludingthan the $200 public the million World actually even Jewish before Congress, Mr. Lau- decades,As the according son of a fabulouslyto a sliver of wealthy data re- for the Republican nomination for may- tax code for the 1 percent is different storiedyearsStill, the because American family’s of fortune. thetax planning alternative His mother,was mini- ef- inathe maze AsVienna public the of asprivately songood. a boy, of a developing held fabulously trustsone a ofand wealthypassion the com- world’sGeneralknownwhose wealthiest causesas Motors fractional apartment include Building donation, the in Whitney Manhattan, was elim- Mu- build Jewish communities devastated theing, public then thegood. major thing the collector whichshares, serves the maneuveras the hub allowed for the themmatrix to tonue, Mr. cash a Lauder’s building in theirof foundations, more that shareholdings wasrecent oncetions investment tax home — withoutreturns at an to funds, earlyOnlyby part-age. the the HolocaustHe truly Johnsummered rich D. and can Rockefeller, communist usenerships derivatives and rule.and is trusts knownsouth,isRonald entitledused as at to the Lauder Mr.tocontrol Newdeduct Lauder Yorkhashis the has notPublic full alsobeen market Library,given a di-val-to a varietyandHis his of stake wife have in Estée also established LauderJewish Compa- andtheir IsraeliembassieswidelyUnited organizations, praised States around for tax making the in-law worldallows getshis artwork access —taxpay- more toa thewhere works he they has are served donat- as president since fashionleased annually icon, Mr. by Lauder the I.R.S. developed The ef- aristocratic tastes — and grand aspira-from the tax code for the 99 percent,” Estéefectivemum Lauder, taxenough and other thethat daughter limits.after Estée of EasternLauder forpanies.“If Austrian an Courtart artcollector documents, and medieval makes S.E.C. significant armor. filings At whichinatedseum and servesin 2006.) thecontributions, aspink The the ribbon tax hub code for campaign and alsothe the matrixallows public for nue, actually a building that was once home to byder the added Holocaust dozens and of pieces communist for its rule. 10th gets is prestige and social status,” said orofhave foundations,of New a neutral York investmentandposition released in the funds, his stock, tax part- re- not John D. Rockefeller,nerships and and trusts in is Vienna known used as asto a controlboy,toMr. developingget Lauder his the best onehas a passion ofalsoof boththe given world’s worlds tobusinesses a wealthiestvariety— lots andof apartment personalfashionrectorto receive of finances. icon,the Jewish the company Mr. Carnegie and Lauder since Israeli buildings. Foundation’s 2009, developed organizations,but he nies,own family in-according trusts, to allowing regulatorycluding them filings, to the be- is Worldersthancommunity to Jewish adeduct quarter asset. Congress,mortgage of a billion interesting, dollars thenon one’s over the major2007. thing Richard the Parsons, collector the former Time “If an art collector makes significant aristocraticfective federal tastes income — and tax grand rate aspira- for the tions — at an early age. He summeredpayingremainsaid Victor private, taxes. 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Israelilittle risk.” At organizations,His stake in- in EstéearistocraticstillMedal serves Lauderof Philanthropy. cludingtastes as Compa- the — president the and WorldgrandUnited of aspira- itsJewish States Cli- Congress, taxvaluedqueath law at theirallows more wealth taxpay-than $600 to their million.where heirs heNear- with has servedhomestheThe lastas uppresident Neue fiveto $1.1 Galerie, years, millionsince according created in getsdebt. is byHouse- toprestige Mr. his andWarner social chairman, status,” saidpresented the award, contributions, and the public actually tions400 wealthiest— at an early taxpayers, age. He representing summered in Vienna as a boy, developing a thethempassionthe technique Universityavailable for was of this Colorado.so article. aggressive “Any that tax- homemadebillion to her beauty heirs, creams according at a to few tax New ex- moneyofgets(For the access moreyears, from toordinary hisMr. the barLauder works tax mitzvah. they breaksavailed are Mr. used donat-himself Lau- by nershipsbusinessRonald expense.and Laudering, trusts then and used the his major to wife, control Jothing Car- his the collectorone of the world’s wealthiest apartment JewishSheldon and Cohen, Israeli a former organizations, I.R.S. com- in- At times, Mr. Lauder’s efforts to en- percentbusinessesrules at in the and total time, personal federal, they finances. avoidedstate and paying city buildings. His stake inage Estée 13, he Lauder bought cluding Compa- CharityhisWhile first Mr. the Schiele and Lauder’sUnited World Tax with StatesJewish Breaksstocknies, tax holdings Congress, accordinglaw allows in to tionsniquetaxpay- regulatoryThe —Laboratories programat anwhere filings, early honoredhe subdivision. age. ishas Heserved ers people summered to Hededuct as whoalsopresident mortgageminimal since interest taxes. on one’s 2007. Richard Parsons,spokesman.Lauder the and former Serge Time Sabarsky,Mr. who Cohen, died nowin a lawyer in Washington. gets access to the works they are donat- inthe Vienna top 0.000258 as a boy, percent, developing fell from a passion about for Austrian art and medieval armor.Congresspayer At lucky enacted enough a law to have afterward appreciated that Yorkperts Citywho hairstudied salons the case in the and 1940s estimat- and deraffluenting,of a grew then quirk people. sothe in enthralled major the tax thing code by the politics that collector allowed as a businessesole,Unlike were honored some andgets personal wealthyis for prestige a variety finances. collectors and of social contri- who status,”buildings. said cludingmissioner, the said World that Jewishwhen used Congress, as in- hance his art collection have coincided taxesasHis much on stake about as $95 in $30 Estéemillion million Lauder in incapital income Compa- gains in United Statesnies, tax according law allowsmoney to regulatory taxpay- from his filings, publicly barwhere mitzvah. ishe traded hasers Mr.served to companies deduct Lau- as presidentmortgagevalued show at somesinceinterest more than oninsubletshave Viennaone’s $600 given a million. fullas 2007. a profusely floorboy, RichardNear- developing of office to Parsons,homes charities, space a passion up the from to in- former $1.1 million OtherTime in trusts debt. and House- partnershipsWarner control chairman,1996, presentedThe in Ronald a mansion the S. award, Lauder once FoundationownedAt times,by Cor- has Mr. Lauder’s efforts to en- ing, then the major thing the collector for30 Austrianpercent inart 1995 and to medieval 18 percent armor. in 2008, At age 13, he bought his first SchielelimitedTheproperty with Family the is lengthusually Fortune ofput the to a tax choice: deferral. cash builted A that her week theproduct estate before line was the into taxed opening a multibillion- at an at ef- the younggetsdonorsSignificant is prestige man to take that portions aand deduction he social told of his status,” for friends inherited donating said he arebutions:His criticized stake theMr. work infor Cohen, Estéeusing of their nowtax Lauder breaks jointa lawyer Compa-founda- to inun- Washington.United States tax law allows taxpay- wheretended, he the has tax served code’s asbreaks president for art since col- with tax avoidance techniques. 1988.nies,taxes At according thatthe time, might to his regulatory otherwise net worth have filings,was esti- been is ers to deductvalued mortgage at more interestder than grew on $600 one’s so million. enthralledof2007. Near-his Richardtactics, by politicshomes much Parsons, asup of ahisto the $1.1 wealth former million is hard-Time in debt.forEstéecluding House- Austrian Lauder, Mr.Warner art Lauder’s on and the chairman, medieval 42nd brother story armor. presented Leonard of the At thehis award, real estate properties in Palm Beach donatednelia Vanderbilt, tens of millions offers of public hancedollars viewing his to re-art collection have coincided gets is prestige and social status,” said agethe 13,most he recentbought data his available.first Schiele with money from his bar mitzvah. Mr.Andout Lau- theand Lauders pay some eventually tax, or hold paid the tens prop- of dollarfectiveNeue global rate Galerie of empire. 16 lastpercent month, — about Mr. a Lauder third dreamedstockMr.a portion Cohen, are held of now of becoming anin a family lawyer artwork, thetrusts, in withoutWashington. first which Jewish actu- re- nies,derwritetion according supporting privateAt to times, collections hospitals, regulatory Mr. Lauder’s rebuilding that filings, offer iseffortsers to to en- deduct mortgage interest on one’s 2007.lectors Richard balance Parsons, private the interests former Time with In 2006, three months after he agreed matedvalueddue had at theymore nearly sold than a their quarter $600 own million. ofshares. a billionNear- homesMr. Lauder,up to $1.1 now million 67, was inyoung debt. born House- into man a thaterWarner heto examine told chairman, friends because presented he it is controlled the award, by ageGeneraland 13,his hewife, Motors bought Evelyn Building his (who first in died Schiele Manhattan, Nov. with 12), and the Hamptons and at 740 Park Ave- buildof an Jewishexquisite communities collection,with worth devastated tax moreavoidance techniques. Mr. Cohen, now a lawyer in Washington. moneyWhen from Mr. hisLauder bar mitzvah.ran unsuccessfully Mr. Lau- der grew so enthralled by politicsmillionserty as and a in risk stock the from vagaries the transaction. of the market. ofappeared Asthe thetop estate son at of another tax a rate fabulously at gala, the time. 40 wealthy blocks presidentduceallyAt the times, turning ultimate of the Mr. over United Lauder’s estate the States. art.tax. efforts Mr. That Lauder to break, en- valuedlittlemonuments access at morehance toand the than refurbishing hispublic, $600 art million.collectionMr. AmericanLauder Near- have is coincidedhomes up to $1.1 million in debt. House- Warnerthe public chairman, good. presented the award, to pay $135 million, a record at the time, dollars.Such transactions allowed investors storied American fortune.dreamed His mother, of becominga maze the of privately first Jewish held trusts and com- moneywhichwhose serves causes from his asinclude the bar hub mitzvah. the for Whitney the Mr. matrix Lau-Mu- nue, a building that was once home to bythan the $200 Holocaust million even and communistbeforeIn Mr.2006, rule.Lau- three months after he agreed At times, Mr. Lauder’s efforts to en- derfor grewthe Republican so enthralled nomination by politics for asmay- a young man that he told friendsOnlyStill, he the the trulyfamily’s rich tax can planning use derivatives was ef- fashionsouth,Ronald at icon, Lauderthe New Mr. hasYork Lauder not Public been developed Library, a di- andhanceknownAfter his his wifestudyingas art fractional have collection in also Brussels donation, established have andcoincided was Paristheir elim- widelyembassies praised with around for tax making theavoidance world his artwork techniques. — more a “If an art collector makes significant for the Klimt painting “Adele Bloch- toMr. cash Lauder’s in their more shareholdings recent tax returns without Estée Lauder, the daughterpresident of Eastern of the Unitedpanies. States. Court documents, S.E.C. filings derofseum foundations, grew and sothe enthralled pink investment ribbon by campaign politics funds, part- as for a John D. Rockefeller, and is known as Mr.der Lauder added dozenshas also of given pieces toto a forpay variety its $135 10th ofmillion, a record at the time, hance his art collection have coincided youngor of New man York that and he released told friends his tax here- dreamed of becoming the firstfective Jewish enough that after Estée Lauder aristocraticto receive tastes the Carnegie — and grand Foundation’s aspira- andownwithinated atfamilytax thein avoidance 2006.) Whartontrusts, The allowingtechniques. Schooltax code them at also the toallows Uni- be- communitythan a quarter asset.In of2006, a billion three dollarsmonths overafter he agreed contributions, and the public actually Bauer I,” Mr. Lauder sold a $190 million remainpaying private, taxes. and But he the declined Lauders’ to make use of Europeanto get the immigrants,best of both worlds began — selling lots of andrector property of the company tax records since spotlight 2009, but a few he youngnershipsbreast cancer man and thattrustsawareness. he used told to friendscontrol his he one of the world’s wealthiest apartment Jewishanniversary. and Israeli organizations, in- with tax avoidance techniques. dreamedturn to the of public, becoming he reported the first paying Jewish 30 president of the United States. died in 2004, she passed downAfter nearly studying $4 tions in Brussels — at an and early Paris age. He summered versityqueathartworkIn 2006, theirof inthree Pennsylvania, offices wealth months to to be theirafter he deducted joinedheirshe agreed with theas a theThe last Neue fiveto pay Galerie, years, $135 according million, created a byrecord to Mr. his at the time, for the Klimt paintinggets access “Adele to the Bloch- works they are donat- stake in his broadcast network CME. themthe techniqueavailable for was this so article. aggressive that homemadecash and very beauty little creams risk.” at a few New ofstillMedal the serves more of Philanthropy. ordinary as the president tax breaks of used its Cli- by dreamedbusinesses of and becoming personal the finances. first Jewish buildings. cludingSheldon the Cohen, World a former Jewish I.R.S. Congress, com- In 2006, three months after he agreed presidentpercent inof the total United federal, States. state and city After studying in Brussels andbillion Paris to her heirs, accordingand to at tax the ex- Whartonin Vienna School as at a theboy, Uni-developing a passion familyminimaltobusiness Ronaldpay $135business taxes. Lauderexpense. million, in and1964 a record his and wife, servedat the Jo time, Car-in a spokesman.for the Klimt painting “Adele Bloch- Bauer I,” Mr. Laudering, sold then a the $190 major million thing the collector When asked about the sale, Mr. Lau- Congress enacted a law afterward that YorkWhile City Mr. hair Lauder’s salons instock the holdings 1940s and in niqueThe Laboratories program honored subdivision. people He also who presidentHis stake of the in United Estée States. Lauder Compa- LauderUnited and States Serge tax Sabarsky, law allows who taxpay- died in missioner, said that when used as in- to pay $135 million, a record at the time, taxesAfter on studying about $30 in Brusselsmillion in and income Paris in and at the Wharton School at theperts Uni- who studied the caseversity and estimat- of Pennsylvania,foraffluent Austrian people. he joinedart and the medieval armor. At varietyole,for Unlike were the of Klimthonored limited some painting wealthy roles.for a variety While “Adele collectors ofhis contri- Bloch- older who Bauer I,” Mr. Lauder sold a $190where million he has served as presidentstake in sincehis broadcastgets networkis prestige CME. and social status,” said der’s spokesman said the proceeds limited the length of the tax deferral. builtpublicly her product traded line companies into a multibillion- show some subletshave given a full profuselyfloor of office to charities, space from in- AfterOther studyingtrusts and in partnerships Brussels and control Paris ers1996,The to in deduct Ronald a mansion mortgage S. Lauder once interest Foundationowned onby one’s Cor- has tended, the tax code’s breaks for art col- for the Klimt painting “Adele Bloch- and1988. at At the the Wharton time, his School net worth at thewas Uni- esti- The Familyversity Fortune of Pennsylvania, he joineded that the the estate was taxedfamily at business an ef- inage 1964Significant 13, andhe boughtserved portions hisin a first of hisSchiele inherited with brothernies,butions:Bauerare criticized according I,” Leonardthe Mr. work Lauder for to roseusing of regulatory theirsold to tax become ajoint breaks$190 filings, founda- million Estée to un- is stake in his broadcast network CME.2007. Richard Parsons, the formerWhen Timeasked aboutMr. Cohen, the sale, now Mr. a lawyerLau- in Washington. were taxable in the United States at the And the Lauders eventually paid tens of dollarof his global tactics, empire. much of his wealth is hard- Estéecluding Lauder, Mr. Lauder’s on the 42nd brother story Leonard of the andhis real at theestate Wharton properties School in Palm at the Beach Uni- homesneliadonated Vanderbilt, up tens to $1.1 of millions million offers inof public debt.dollars viewingHouse- to re- lectors balance private interests with Bauer I,” Mr. Lauder sold a $190 million versitymated of at Pennsylvania, nearly a quarter he joinedof a billion the family business in 1964 and servedfective in arate of 16 percent —variety about a of third limitedmoneystock roles. are While from held his hisin family barolder mitzvah. trusts, which Mr. Lau- re- Lauder’svaluedtionstakederwrite supportingin at his more chief private broadcast than executive, hospitals, collections $600 network million. Ronald rebuilding CME. that Near- offer en- When asked about the sale, Mr.Warner Lau- chairman, presentedder’s the award, spokesman At said times, the Mr. proceeds Lauder’s efforts to en- full capital gains rate. Even then, millionsMr. Lauder, in stock now from 67, the was transaction. born into a erAs to theexamine son ofbecause a fabulously it is controlled wealthy by Generaland his Motorswife, Evelyn Building (who in died Manhattan, Nov. 12), versityand the ofHamptons Pennsylvania, and at he740 joinedPark Ave- the ofbuild an exquisiteJewish communities collection, worth devastated more the public good. stake in his broadcast network CME. familydollars. business in 1964 and served in a variety of limited roles. While hisof theolder top estate tax rate at brotherthe time. Leonard derduce rose grew the to becomeultimate so enthralled Estéeestate bytax. politics Mr. Lauder as a gagedmonumentslittleWhen access in asked a variety and to aboutthe refurbishing ofpublic, the pursuits: sale, Mr. American Mr.Lauder becom- Lau- is der’s spokesman said the proceeds were taxable in thehance United his Statesart collection at the have coincided though, CME’s complex corporate storiedStill, Americanthe family’s fortune. tax planning His mother, was ef- fashiona maze of icon, privately Mr. held Lauder trusts developed and com- whichwhose serves causes as include the hub the for Whitney the matrix Mu- familynue, a business building thatin 1964 was and once served home in toa thanby the $200 Holocaust million even and communistbefore Mr. Lau- rule. “If an art collector makes significant When asked about the sale, Mr. Lau- varietyMr. Lauder’sof limited more roles. recent While tax his returns older brother Leonard rose to become Ronald Estée Lauder has notLauder’s been a chief di- executive,youngand his manwife Ronald have that also he en- established told friends their he ingembassiesder’swidely a spokesman major praised around Republican for making thesaid world the fund-raiser;his proceedsartwork — more a were taxable in the United States at the full capital gainswith rate. tax avoidance Even then, techniques. structure — it operates in Central Eu- Estéefective Lauder, enough the that daughter after Estée of Eastern Lauder aristocraticpanies. Court tastes documents, — and grand S.E.C. aspira- filings ofseum foundations, and the pink investment ribbon campaign funds, part- for varietyJohn D. of Rockefeller, limited roles. and While is known his older as derMr. Lauder added dozenshas also of given pieces to a for variety its 10th of contributions, and the public actually der’s spokesman said the proceeds brotherremain Leonardprivate, and rose he to declined become to Estée make Lauder’s chief executive, Ronaldrector en- of the company sincegaged 2009, inbut a he varietydreamedown of family pursuits: of trusts, becoming becom- allowing the firstthem Jewish to be- servingthanwerecommunity ataxable quarter a rocky asset. in of the tenure a United billion as States ambassadordollars at over the full capital gains rate. Even then, though, CME’s complexIn 2006, three corporate months after he agreed rope, is organized as a Netherlands Europeandied in 2004, immigrants, she passed begandown nearly selling $4 tionsand property— at an taxearly records age. He spotlight summered a few nershipsbreast cancer and trusts awareness. used to control his brotherone of the Leonard world’s rose wealthiest to become apartment Estée anniversary.Jewish and Israeli organizations, in- gets access to the works they are donat- were taxable in the United States at the Lauder’sthem available chief for executive, this article. Ronald en- gaged in a variety of pursuits: still becom- serves as the presidenting of a its major Cli- Republicanpresidentqueath their of fund-raiser; the wealth United to States. their heirs with tothefull Austria; The last capital Neue five running gains years, Galerie, rate.for according created mayor, Even an toby then, un- his Mr. though, CME’s complex corporate structure — it operatesto pay $135 in Centralmillion, Eu-a record at the time, holding company, keeps its headquar- homemadebillion to her beauty heirs, creams according at a fewto tax New ex- inof Vienna the more as aordinary boy, developing tax breaks a passion used by businessesRonald Lauderand personal and hisfinances. wife, Jo Car- Lauder’sbuildings. chief executive, Ronald en- cludingSheldon the Cohen, World a former Jewish I.R.S. Congress, com- ing, then the major thing the collector full capital gains rate. Even then, gaged in a variety of pursuits: becom- ing a major Republican fund-raiser;nique Laboratories subdivision.serving He a also rocky tenureminimalAfter asstudying taxes. ambassador in Brussels and Paris successfulspokesman.though,Lauder and CME’sbid Serge in which complexSabarsky, he spent who corporate $363 died for in structure — it operates in Central Eu- rope, is organizedfor as the a Klimt Netherlands painting “Adele Bloch- ters in Bermuda and routed the $190 Yorkperts City who hair studied salons the incase the and 1940s estimat- and foraffluent Austrian people. art and medieval armor. At ole,His were stake honored in Estée for a Laudervariety of Compa- contri- gagedUnited in aStates variety tax of law pursuits: allows taxpay- becom- missioner,where he has said served that whenas president used assince in- gets is prestige and social status,” said though, CME’s complex corporate ing a major Republican fund-raiser; serving a rocky tenure as ambassadorsublets a full floor of officeto space Austria; from runningandOther for at the mayor,trusts Wharton and an partnerships un- School at the control Uni- eachstructure1996,The vote inRonald a — hemansion itreceived; S. operates Lauder once and Foundation inowned Centralstarting by has Eu-Cor-an rope, is organized as a Netherlands holding company,Bauer keeps I,” itsMr. headquar- Lauder sold a $190 million million sale through two Cayman Island The Family Fortune builted thather product the estate line was into taxeda multibillion- at an ef- ageSignificant 13, he bought portions his first of Schiele his inherited with nies,butions: according the work to regulatoryof their joint filings, founda- is ingers to a deduct major mortgage Republican interest fund-raiser; on one’s tended,2007. Richard the tax Parsons, code’s breaks the former for art Time col- Mr. Cohen, now a lawyer in Washington. structure — it operates in Central Eu- serving a rocky tenure as ambassador to Austria; running for mayor,Estée an un- Lauder, on the 42ndsuccessful story of the bid in whichversityhis real he estate of spent Pennsylvania, properties $363 for in he Palm joined Beach the assortmentdonatedrope,nelia is Vanderbilt, tens organized ofof millions business offers as of a public dollars ventures Netherlands viewing to re- in holding company, keeps its headquar- ters in Bermudastake and in routed his broadcast the $190 network CME. companies — allowed Mr. Lauder to dollarfective global rate ofempire. 16 percent — about a third moneystock are from held his in bar family mitzvah. trusts, Mr. which Lau- re- valuedtion supportingat more than hospitals, $600 million. rebuilding Near- servinghomes up a rockyto $1.1 tenuremillion asin debt. ambassador House- lectorsWarner balancechairman, private presented interests the award, with At times, Mr. Lauder’s efforts to en- rope, is organized as a Netherlands to Austria;Mr. Lauder, running now 67,for was mayor, born an into un- a successful bid in which he spent General$363 for Motors Building ineach Manhattan, vote he received;familyand the businessand Hamptons starting in 1964and an atand 740 served Park Ave-in a Easternbuildholdingof an Jewish exquisite company, Europe, communities collection, one keeps of its which worth devastated headquar- went more ters in Bermuda and routed the $190 million sale throughWhen two Cayman asked about Island the sale, Mr. Lau- minimize taxes in countries outside the ofAs the the top sonestate of tax a fabulouslyrate at the time. wealthy derduce grew the ultimate so enthralled estate by tax. politics Mr. Lauder as a monuments and refurbishing American to Austria; running for mayor, an un- the public good. hance his art collection have coincided holding company, keeps its headquar- successfulstoried American bid in which fortune. he spent His $363 mother, for each vote he received; and startingwhich an serves as the hub forassortment the matrix of businessvarietynue, a buildingof ventureslimited that roles. in was While once his home older to bankruptbytersthan the in $200 Holocaust Bermuda during million the andeven technology communist routed before thebubble.Mr. rule. $190Lau- million sale through two Cayman Island companies — allowedder’s spokesman Mr. Lauder said to the proceeds United States where it does business. fashionRonald icon, Lauder Mr. has Lauder not developedbeen a di- youngand his man wife thathave healso toldestablished friends their he embassies around the world — more successful bid in which he spent $363 for “If an art collector makes significant with tax avoidance techniques. ters in Bermuda and routed the $190 eachEstée vote Lauder, he received; the daughter and starting of Eastern an assortment of business venturesof foundations, in investmentEastern funds, part- Europe,brotherJohn one D. of Leonard Rockefeller, which rose went and to become is known Estée as Mr.millionderWhile Lauder added sale the hasthroughfamily’s dozens also ofgivenwealthtwo pieces Cayman to was a forvariety created itsIsland 10th of companies — allowed Mr. Lauder to minimize taxes inwere countries taxable outside in the theUnited States at the Some tax reform advocates say that it aristocraticrector of the tastes company — and since grand 2009, aspira- but he dreamedown family of becomingtrusts, allowing the first them Jewish to be- than a quarter of a billion dollars over each vote he received; and starting an contributions, and the public actually In 2006, three months after he agreed million sale through two Cayman Island assortmentEuropean immigrants, of business began ventures selling in Eastern Europe, one of whichnerships went and trusts used tobankrupt control duringhis theLauder’sone technology of the chiefworld’s bubble. executive, wealthiest Ronald apartment en- byJewishcompaniesanniversary. hard andwork — Israeli and allowed ingenuity, organizations, Mr. it Lauder was bol- in- to minimize taxes in countries outside the United States wherefull it capitaldoes business. gains rate. Even then, is unfair that the wealthiest can sub- tionsstill — serves at an as early the age. president He summered of its Cli- presidentqueath their of the wealth United to States. their heirs with the last five years, according to his assortment of business ventures in gets access to the works they are donat- to pay $135 million, a record at the time, companies — allowed Mr. Lauder to Easternhomemade Europe, beauty one creams of whichat a few went New bankrupt during the technology businessesbubble. and personal finances.While the family’sgagedbuildings. wealth in a was variety created of pursuits: becom- steredcludingminimizeSheldon by the taxes aggressive Cohen, World in countries a Jewish former tax planning, outside I.R.S.Congress, com-the a United States where it does business. Some tax reformthough, advocates CME’s say that complex it corporate sidize their lifestyles using myriad off- innique Vienna Laboratories as a boy, developing subdivision. a passion He also minimalAfter studying taxes. in Brussels and Paris spokesman. Eastern Europe, one of which went ing, then the major thing the collector for the Klimt painting “Adele Bloch- minimize taxes in countries outside the bankruptYork City during hair salonsthe technology in the 1940s bubble. and While the family’s wealth was createdHis stake in Estée Lauderby hard Compa- work anding ingenuity,United a major States it was Republican tax bol- law allows fund-raiser; taxpay- skillwhereUnitedmissioner, that heStates has said whereserved become that it as does whenRonald president business. used Lauder’s since as in- Some tax reform advocates say that it is unfair that thestructure wealthiest — it can operates sub- in Central Eu- shore maneuvers and complex account- forsublets Austrian a full art floor and medieval of office spacearmor. from At andOther at the trusts Wharton and partnerships School at the control Uni- The Ronald S. Lauder Foundation has bankrupt during the technology bubble. gets is prestige and social status,” said Bauer I,” Mr. Lauder sold a $190 million United States where it does business. builtWhile her the product family’s line wealth into a was multibillion- created by hard work and ingenuity, it wasnies, bol- according to regulatorystered filings, by aggressive is servingers to deduct tax a rocky planning, mortgage tenure a interest as ambassador on one’s specialty.2007.tended,Some Richard tax the When reform tax Parsons, Mr.code’s advocates Lauder’s breaksthe former father,say for artthat Time Jo- col- it is unfair that the wealthiest can sub- sidize their lifestylesrope, using is organized myriad off- as a Netherlands ing strategies. ageEstée 13, Lauder,he bought on histhe first 42nd Schiele story ofwith the versityhis real of estate Pennsylvania, properties hein Palm joined Beach the donated tens of millions of dollars to re- While the family’s wealth was created Mr. Cohen, now a lawyer in Washington. stake in his broadcast network CME. Some tax reform advocates say that it bydollar hard global work empire.and ingenuity, it was bol- stered by aggressive tax planning,valued aat more than $600 million.skill that Near- has becometohomes Austria; Ronald up to running $1.1 Lauder’s million for in mayor, debt. House- an un- seph,Warnerislectors unfair died chairman, balance that in the 1983, private presented wealthiest family interests the members can award, sub- with sidize their lifestyles using myriad off- shore maneuversholding and complex company, account- keeps its headquar- “It’s admirable when people back moneyGeneral from Motors his barBuilding mitzvah. in Manhattan, Mr. Lau- familyand the business Hamptons in 1964 and andat 740 served Park inAve- a build Jewish communities devastated by hard work and ingenuity, it was bol- At times, Mr. Lauder’s efforts to en- When asked about the sale, Mr. Lau- is unfair that the wealthiest can sub- steredAs the by aggressiveson of a fabulously tax planning, wealthy a skill that has become Ronald Lauder’s specialty. When Mr.successful Lauder’s bid father, in which Jo- he spent $363 for foughtsidizethe public theirthe I.R.S. good. lifestyles for more using than myriad a decade off- shore maneuvers and complex account- ing strategies. ters in Bermuda and routed the $190 their charitable impulses up with dona- derwhich grew serves so enthralled as the hub by for politics the matrix as a varietynue, a of building limited that roles. was While once his home older to by the Holocaust and communist rule. stered by aggressive tax planning, a hance his art collection have coincided der’s spokesman said the proceeds sidize their lifestyles using myriad off- skillfashion that hasicon, become Mr. Lauder Ronald developed Lauder’s specialty. When Mr. Lauder’s father, Jo- seph, died in 1983,each familyvote he membersreceived; and starting an toshore reduce“If maneuversan art their collector estate and complex tax.makes The significant account- dispute ing strategies. “It’s admirablemillion when sale people through back two Cayman Island tions,” said Scott Klinger, tax policy di- youngof foundations, man that investment he told friends funds, part- he brotherJohn D. Leonard Rockefeller, rose to and become is known Estée as Mr. Lauder has also given to a variety of skill that has become Ronald Lauder’s with tax avoidance techniques. were taxable in the United States at the shore maneuvers and complex account- specialty.aristocratic When tastes Mr. —Lauder’s and grand father, aspira- Jo- seph, died in 1983, family members fought the I.R.S. forassortment more than of a decade business ventures in involvedingcontributions, strategies. a block and of shares the public bequeathed actually “It’s admirable when people back their charitable impulsescompanies up —with allowed dona- Mr. Lauder to rector of the group Business for Shared dreamednerships ofand becoming trusts used the to first control Jewish his Lauder’sone of the chief world’s executive, wealthiest Ronald apartment en- Jewish and Israeli organizations, in- specialty. When Mr. Lauder’s father, Jo- In 2006, three months after he agreed full capital gains rate. Even then, ing strategies. seph,tions — died at an in early 1983, age. family He summered members president offought the United the I.R.S. States. for more than a decade to reduce their estateEastern tax. Europe, The dispute one of which went togets “It’s the access family admirable to — the the works when estate they people valued are donat- back it at to pay $135 million,their charitable a record impulses at the time, up with dona- tions,” said Scottminimize Klinger, taxtaxes policy in countries di- outside the Prosperity. “But the tax code shouldn’t businesses and personal finances. gagedbuildings. in a variety of pursuits:involved becom- a block ofcluding shares the bequeathed World Jewish Congress, seph, died in 1983, family members though, CME’s complexrector corporate of the group Business for Shared “It’s admirable when people back foughtin Vienna the I.R.S.as a boy, for developingmore than a a decadepassion to reduce their estate tax. The dispute bankrupt during the technology bubble. $29theiring, million, charitable then thewhile major impulses the thingI.R.S. up theplaced with collector dona- it at tions,” said Scott Klinger, tax policy di- UnitedJOHN VANStates BEEKUM where FOR THE it NEWdoes YORK business. TIMES allow the wealthy the kind of loopholes AfterHis stakestudying in Estéein Brussels Lauder and Compa- Paris ing United a major States Republican tax law allows fund-raiser; taxpay- where he has served as president since fought the I.R.S. for more than a decade for the Klimt painting “Adele Bloch- structure — it operates in Central Eu- their charitable impulses up with dona- tofor reduce Austrian their art estate and medieval tax. The armor. dispute At and at the Whartoninvolved aSchool block at of the shares Uni- bequeathed to the family — theWhile estate the valued family’s it wealth at was created $89.5tions,”gets ismillion. said prestige Scott A and panelKlinger, social of tax judgesstatus,” policy ulti- saiddi- Bauer I,” Mr.rector Lauder of the sold group a $190 Business million for Shared Prosperity. “But theSome tax codetax reform shouldn’t advocates say that it that let them, essentially, force other nies, according to regulatory filings, is servingers to deduct a rocky mortgage tenure asinterest ambassador on one’s 2007. Richard Parsons, the former Time to reduce their estate tax. The dispute rope, A is TAX organized BEGETS A as TAX a BREAK Netherlands tions,” said Scott Klinger, tax policy di- involvedage 13, he a blockbought of his shares first bequeathedSchiele with versity of Pennsylvania,to the family — he the joined estate the valued it at $29 million, whileby the hard I.R.S. work placed and itingenuity, at it was bol- matelyrectorMr. Cohen, of decided the now group ona lawyer Business $50 million, in Washington. for aShared deci- stake in his broadcastProsperity. network “But theJOHN CME. tax VAN BEEKUMcode shouldn’t FOR THE NEW YORK TIMES allow the wealthyis the unfair kind thatof loopholes the wealthiest can sub- taxpayers to underwrite donations to valued at more than $600 million. Near- tohomes Austria; up to running $1.1 million for mayor,in$89.5 debt. million. anHouse- un- A panelWarner of chairman, judges ulti- presented the award, involved a block of shares bequeathed holding company, keeps itsthat headquar- let them, essentially, force other rector of the group Business for Shared tomoney the family from — his the bar estate mitzvah. valued Mr. it Lau- at family business$29 million, in 1964 whileand served the I.R.S. in a placed it at stered by aggressive tax planning, a sionProsperity.At that times, saved “But Mr.JOHN the theLauder’s VAN estate tax BEEKUM codemore effortsFOR shouldn’tTHE than NEW to $20 YORK en- TIMESWhen askedallow about theMr. wealthythe Lauder sale, thepaysMr. kind Lau- $400,000 of loopholes in property taxes annually on his Palmsidize Beach their mansion. lifestyles using myriad off- their pet causes.” successful bid in which he spentmately $363 decided for on $50 million, a deci- to the family — the estate valuedA TAX it at BEGETS A TAX BREAK ters in Bermuda and routed the $190 Prosperity. “But the tax code shouldn’t $29der million, grew so while enthralled the I.R.S. by placed politics it as at a $89.5 million. A panel of judges ulti- skillJOHN that VAN hasBEEKUM become FOR THE NEW Ronald YORK TIMES Lauder’s allowhance the his wealthy art collection the kind have of loopholes coincided that let them, essentially, force other taxpayers to underwriteshore maneuvers donations and to complex account- variety of limited roles. While his older $29 million, while the I.R.S. placed it at der’s spokesman said the proceeds JOHN VAN BEEKUM FOR THE NEW YORK TIMES allow the wealthy the kind of loopholes young man that he told friends he mately decided on $50 million, each a deci- vote he received; andsion starting that saved an the estate more thanA $20TAX BEGETS A TAX BREAKwithMr. Lauder tax avoidance pays $400,000 techniques. in property taxes annuallytaxpayers on his to Palm underwrite Beach mansion. donationsmillion to sale through two Caymantheir pet Island causes.” $89.5 million. A panel of judges ulti- brother Leonard rose to become Estée specialty. When Mr. Lauder’s father, Jo- $89.5that let million. them, A essentially, panel of judges force other ulti- were taxable in the United States at the ing strategies. that let them, essentially, force other dreamed of becoming the first Jewish sion that saved the estate more thanassortment $20A TAX BEGETS of business A TAX BREAK ventures in In 2006, three months after he agreed their pet causes.” companies — allowed Mr. Lauder to mately decided on $50 million, a deci- Lauder’s chief executive, Ronald en- Mr. Lauder paysseph, $400,000 died in 1983,in property family taxes members annuallymatelytaxpayers on his decided Palm to underwrite Beach on $50 mansion. million, donations a deci- to full capital gains rate. Even then, A TAX BEGETS A TAX BREAK “It’s admirable when people back taxpayers to underwrite donations to president of the United States. Eastern Europe, one of which went to pay $135 million, a record at the time, minimize taxes in countries outside the sion that saved the estate more than $20 gaged in a varietyMr. of pursuits:Lauder pays becom- $400,000 in property taxes annually on his Palmfought Beach the I.R.S. mansion. for more than a decade siontheir that pet causes.”saved the estate more than $20 though, CME’s Mr. complex Lauder corporate pays $400,000 in property taxes annually on his Palmtheir Beach charitable mansion. impulses up with dona- their pet causes.” After studying in Brussels and Paris bankrupt during the technology bubble. to reduce their estate tax. The dispute for the Klimt painting “Adele Bloch- United States where it does business. tions,” said Scott Klinger, tax policy di- ing a major Republican fund-raiser; While the family’s wealth was created structure — it operates in Central Eu- Some tax reform advocates say that it and at the Wharton School at the Uni- serving a rocky tenure as ambassador involved a block of shares bequeathed Bauer I,” Mr. Lauder sold a $190 million rope, is organized as a Netherlands rector of the group Business for Shared versity of Pennsylvania, he joined the by hard work and ingenuity, it was bol- to the family — the estate valued it at stake in his broadcast network CME. is unfair that the wealthiest can sub- Prosperity. “But the tax code shouldn’t to Austria; running for mayor, an un- stered by aggressive tax planning, a holding company, keeps its headquar- sidize their lifestyles using myriad off- family business in 1964 and served in a $29 million, while the I.R.S. placed it at When asked about the sale, Mr. Lau- JOHN VAN BEEKUM FOR THE NEW YORK TIMES allow the wealthy the kind of loopholes successful bid in which he spent $363 for skill that has become Ronald Lauder’s ters in Bermuda and routed the $190 shore maneuvers and complex account- variety of limited roles. While his older each vote he received; and starting an $89.5 million. A panel of judges ulti- der’s spokesman said the proceeds million sale through two Cayman Island that let them, essentially, force other brother Leonard rose to become Estée specialty. When Mr. Lauder’s father, Jo- mately decided on $50 million, a deci- were taxable in the United States at the A TAX BEGETS A TAX BREAK ing strategies. taxpayers to underwrite donations to assortment of business ventures in seph, died in 1983, family members companies — allowed Mr. Lauder to “It’s admirable when people back Lauder’s chief executive, Ronald en- Eastern Europe, one of which went sion that saved the estate more than $20 full capital gainsMr. rate.Lauder Even pays then,$400,000minimize in property taxes in taxes countries annually outside on the his Palm Beach mansion. their pet causes.” gaged in a variety of pursuits: becom- fought the I.R.S. for more than a decade though, CME’s complex corporate their charitable impulses up with dona- bankrupt during the technology bubble. to reduce their estate tax. The dispute United States where it does business. tions,” said Scott Klinger, tax policy di- ing a major Republican fund-raiser; While the family’s wealth was created structure — it operates in Central Eu- Some tax reform advocates say that it serving a rocky tenure as ambassador involved a block of shares bequeathed rope, is organized as a Netherlands rector of the group Business for Shared by hard work and ingenuity, it was bol- to the family — the estate valued it at is unfair that the wealthiest can sub- Prosperity. “But the tax code shouldn’t to Austria; running for mayor, an un- stered by aggressive tax planning, a holding company, keeps its headquar- sidize their lifestyles using myriad off- successful bid in which he spent $363 for $29 million, while the I.R.S. placed it at ters in Bermuda and routed the $190 JOHN VAN BEEKUM FOR THE NEW YORK TIMES allow the wealthy the kind of loopholes skill that has become Ronald Lauder’s $89.5 million. A panel of judges ulti- shore maneuvers and complex account- that let them, essentially, force other each vote he received; and starting an specialty. When Mr. Lauder’s father, Jo- millionA TAX sale BEGETS through A two TAX Cayman BREAK Island ing strategies. assortment of business ventures in mately decided on $50 million, a deci- companies — allowed Mr. Lauder to taxpayers to underwrite donations to seph, died in 1983, family members sion that saved the estate more than $20 Mr. Lauder pays $400,000 in property taxes annually on his Palm“It’s Beach admirable mansion. when people back their pet causes.” Eastern Europe, one of which went fought the I.R.S. for more than a decade minimize taxes in countries outside the their charitable impulses up with dona- bankrupt during the technology bubble. to reduce their estate tax. The dispute United States where it does business. tions,” said Scott Klinger, tax policy di- While the family’s wealth was created involved a block of shares bequeathed Some tax reform advocates say that it rector of the group Business for Shared by hard work and ingenuity, it was bol- to the family — the estate valued it at is unfair that the wealthiest can sub- Prosperity. “But the tax code shouldn’t stered by aggressive tax planning, a sidize their lifestyles using myriad off- $29 million, while the I.R.S. placed it at JOHN VAN BEEKUM FOR THE NEW YORK TIMES allow the wealthy the kind of loopholes skill that has become Ronald Lauder’s $89.5 million. A panel of judges ulti- shore maneuvers and complex account- that let them, essentially, force other specialty. When Mr. Lauder’s father, Jo- mately decided on $50 million, a deci- A TAX BEGETS A TAX BREAK ing strategies. taxpayers to underwrite donations to seph, died in 1983, family members sion that saved the estate more than $20 Mr. Lauder pays $400,000 in property taxes annually on his Palm“It’s Beach admirable mansion. when people back their pet causes.” fought the I.R.S. for more than a decade their charitable impulses up with dona- to reduce their estate tax. The dispute tions,” said Scott Klinger, tax policy di- involved a block of shares bequeathed rector of the group Business for Shared to the family — the estate valued it at Prosperity. “But the tax code shouldn’t $29 million, while the I.R.S. placed it at JOHN VAN BEEKUM FOR THE NEW YORK TIMES allow the wealthy the kind of loopholes $89.5 million. A panel of judges ulti- that let them, essentially, force other mately decided on $50 million, a deci- A TAX BEGETS A TAX BREAK taxpayers to underwrite donations to sion that saved the estate more than $20 Mr. Lauder pays $400,000 in property taxes annually on his Palm Beach mansion. their pet causes.” from his bar mitzvah. Mr. Lauder grew so en- that limited the length of the tax deferral. And thralled by politics as a young man that he told the Lauders eventually paid tens of millions in friends he dreamed of becoming the first Jewish stock from the transaction. president of the United States. Still, the family’s tax planning was effective After studying in Brussels and Paris and at enough that after Estée Lauder died in 2004, she the Wharton School at the University of Penn- passed down nearly $4 billion to her heirs, ac- sylvania, he joined the family business in 1964 cording to tax experts who studied the case and and served in a variety of limited roles. While estimated that the estate was taxed at an effec- his older brother Leonard rose to become Es- tive rate of 16 percent — about a third of the top tée Lauder’s chief executive, Ronald engaged estate tax rate at the time. in a variety of pursuits: becoming a major Re- Ronald Lauder has not been a director of publican fund-raiser; serving a rocky tenure the company since 2009, but he still serves as as ambassador to Austria; running for mayor, the president of its Clinique Laboratories subdi- an unsuccessful bid in which he spent $363 for vision. He also sublets a full floor of office space each vote he received; and starting an assort- from Estée Lauder, on the 42nd story of the Gen- ment of business ventures in Eastern Europe, eral Motors Building in Manhattan, which serves one of which went bankrupt during the technol- as the hub for the matrix of foundations, invest- ogy bubble. ment funds, partnerships and trusts used to con- While the family’s wealth was created by trol his businesses and personal finances. hard work and ingenuity, it was bolstered by His stake in Estée Lauder Companies, ac- aggressive tax planning, a skill that has become cording to regulatory filings, is valued at more Ronald Lauder’s specialty. When Mr. Lauder’s than $600 million. Nearly $400 million of that father, Joseph, died in 1983, family members stock is pledged to secure various lines of cred- fought the I.R.S. for more than a decade to re- it. Many financial planners consider it impru- duce their estate tax. The dispute involved a dent for principal shareholders in a company block of shares bequeathed to the family — the to borrow against their stock. But it remains a estate valued it at $29 million, while the I.R.S. popular way for wealthy taxpayers to get cash placed it at $89.5 million. A panel of judges ul- out of their holdings without selling and paying timately decided on $50 million, a decision that taxes. saved the estate more than $20 million in taxes. There is a certain irony that Mr. Lauder Estée Lauder Companies went public in has used $72 million worth of his Estée Lauder 1995, and Ronald Lauder and his mother cashed shares to carry out his latest state-of-the-art in hundreds of millions of dollars in stock but tax reduction tactic. These contracts emerged managed to sidestep paying tens of millions in as a popular tool about a decade ago and were federal capital gains taxes by using a hedging developed by accountants and tax planners af- technique known as shorting against the box. ter Congress closed down the loophole on the Together, Mr. Lauder and his mother bor- Estée Lauder public offering. The I.R.S. began rowed 13.8 million shares of company stock from cracking down on these contracts in 2008, and relatives and sold them to the public during the has pursued a prominent case against the bil- offering at $26 a share. Selling borrowed shares lionaire Philip Anschutz, who used one to avoid in this way is referred to as a short position. more than $140 million in federal taxes. Since the Lauders retained their own shares, Whether or not the I.R.S. agrees with Mr. the maneuver allowed them to have a neutral Lauder’s contention that his contract is legiti- position in the stock, not subject to price swings. mate, some tax policy experts say the deal il- Under I.R.S. rules at the time, they avoided pay- lustrates how the wealthy take advantage of the ing as much as $95 million in capital gains taxes system. that might otherwise have been due had they “There’s real truth to the idea that the tax sold their own shares. code for the 1 percent is different from the tax Such transactions allowed investors to cash code for the 99 percent,” said Victor Fleischer, in their shareholdings without paying taxes. a law professor at the University of Colorado. But the Lauders’ use of the technique was so ag- “Any taxpayer lucky enough to have appreci- gressive that Congress enacted a law afterward ated property is usually put to a choice: cash out and pay some tax, or hold the property and Charity and Tax Breaks risk the vagaries of the market. Only the truly A week before the opening at the Neue Gal- rich can use derivatives to get the best of both erie last month, Mr. Lauder appeared at anoth- worlds — lots of cash and very little risk.” er gala, 40 blocks south, at the New York Public While Mr. Lauder’s stock holdings in pub- Library, to receive the Carnegie Foundation’s licly traded companies show some of his tactics, Medal of Philanthropy. much of his wealth is harder to examine be- The program honored people who have giv- cause it is controlled by a maze of privately held en profusely to charities, including Mr. Lauder’s trusts and companies. Court documents, S.E.C. brother Leonard and his wife, Evelyn (who died filings and property tax records spotlight a few Nov. 12), whose causes include the Whitney Mu- of the more ordinary tax breaks used by afflu- seum and the pink ribbon campaign for breast ent people. cancer awareness. Significant portions of his inherited stock Ronald Lauder and his wife, Jo Carole, were are held in family trusts, which reduce the ul- honored for a variety of contributions: the work timate estate tax. Mr. Lauder and his wife have of their joint foundation supporting hospitals, also established their own family trusts, allow- rebuilding monuments and refurbishing Ameri- ing them to bequeath their wealth to their heirs can embassies around the world — more than with minimal taxes. a quarter of a billion dollars over the last five Other trusts and partnerships control his years, according to his spokesman. real estate properties in Palm Beach and the The Ronald S. Lauder Foundation has do- Hamptons and at 740 Park Avenue, a building nated tens of millions of dollars to rebuild Jew- that was once home to John D. Rockefeller, and ish communities devastated by the Holocaust is known as one of the world’s wealthiest apart- and communist rule. Mr. Lauder has also given ment buildings. to a variety of Jewish and Israeli organizations, United States tax law allows taxpayers to including the World Jewish Congress, where deduct mortgage interest on one’s homes up he has served as president since 2007. Richard to $1.1 million in debt. Households with more Parsons, the former Time Warner chairman, than $1 million in income claimed more than $27 presented the award, calling Mr. Lauder and his billion in such deductions from 2006 to ’09, ac- wife two of “the nation’s pre-eminent support- cording to a report this month by Senator Tom ers of the arts and civic causes.” Coburn of Oklahoma, who said some wealthy Mr. Lauder said his life was changed 25 taxpayers even deducted mortgage interest on years ago when he visited a kindergarten in their yachts. Austria and met a classroom full of Jewish chil- And there is no limit on the amount of prop- dren who were refugees from Russia. Still, he erty taxes that can be deducted from federal said he found it odd to be referred to as a philan- income. So Mr. Lauder is entitled to deduct the thropist. $400,000 he pays annually on his Palm Beach “I did what I wanted to do,” he said. “What I mansion as well as what he pays on his home on thought was right.” Park Avenue and his holdings in the Hamptons. “This welfare for the well-off — costing bil- A Passion for Art lions of dollars a year — is being paid for with In the United States, Mr. Lauder has focused the taxes of the less fortunate, many who are on what he calls his greatest passion — art. working two jobs just to make ends meet, and In 1976, at age 32, his generous donations i.o.u.’s to be paid off by future generations,” said helped him become the youngest trustee of the Senator Coburn, a Republican, who has called Metropolitan Museum of Art. He later served for limits on tax breaks for high earners. as chairman of the Museum of Modern Art and Mr. Lauder deducts property taxes on all of remains an honorary chairman. He has donated his holdings, his spokesman said. Mr. Lauder and lent artwork to an assortment of museums. declined to say how much that reduced his fed- Part of his collection of lavishly decorated cer- eral taxes, but said he did not receive tax ben- emonial armor is on display at the Met, in a gal- efits in some years because of the alternative lery named for him. minimum tax and other limits. As all art collectors may, Mr. Lauder is enti- tled to deduct the full market value of artworks structure — it operates in Central Europe, is donated to museums. (For years, Mr. Lauder organized as a Netherlands holding company, availed himself of a quirk in the tax code that keeps its headquarters in Bermuda and routed allowed donors to take a deduction for donating the $190 million sale through two Cayman Island a portion of an artwork, without actually turn- companies — allowed Mr. Lauder to minimize ing over the art. That break, known as fractional taxes in countries outside the United States donation, was eliminated in 2006.) where it does business. Unlike some wealthy collectors who are Some tax reform advocates say that it is criticized for using tax breaks to underwrite unfair that the wealthiest can subsidize their private collections that offer little access to the lifestyles using myriad offshore maneuvers and public, Mr. Lauder is widely praised for making complex accounting strategies. his artwork a community asset. “It’s admirable when people back their The Neue Galerie, created by Mr. Lauder charitable impulses up with donations,” said and Serge Sabarsky, who died in 1996, in a man- Scott Klinger, tax policy director of the group sion once owned by Grace Wilson Vanderbilt, Business for Shared Prosperity. “But the tax the widow of Cornelius Vanderbilt III, offers code shouldn’t allow the wealthy the kind of public viewing of an exquisite collection, worth loopholes that let them, essentially, force other more than $200 million even before Mr. Lauder taxpayers to underwrite donations to their pet added dozens of pieces for its 10th anniversary. causes.” n Sheldon Cohen, a former I.R.S. commis- sioner, said that when used as intended, the tax This article has been revised to reflect code’s breaks for art collectors balance private the following correction published on interests with the public good. December 9, 2011: “If an art collector makes significant con- An article on Nov. 26 about the tax strate- tributions, and the public actually gets access gies used by the businessman and philanthro- to the works they are donating, then the major pist Ronald S. Lauder referred imprecisely to thing the collector gets is prestige and social the tax treatment of art in commercial settings. status,” said Mr. Cohen, now a lawyer in Wash- While the purchase of decorative art or lease ington. payments on rented art may be deducted or de- At times, Mr. Lauder’s efforts to enhance preciated as a business expense, the cost of ac- his art collection have coincided with tax avoid- quiring fine art like the examples in Mr. Laud- ance techniques. er’s collection is generally not deductible. The In 2006, three months after he agreed to pay article also misidentified the previous owner of $135 million, a record at the time, for the Klimt the Fifth Avenue mansion that is now the Neue painting “Adele Bloch-Bauer I,” Mr. Lauder sold Galerie. It was owned by Grace Wilson Vander- a $190 million stake in his broadcast network bilt, the widow of Cornelius Vanderbilt III, not CME. by Cornelia Vanderbilt. Also, a picture with an When asked about the sale, Mr. Lauder’s earlier version of this article was published in spokesman said the proceeds were taxable in error. It showed a house owned by Leonard A. the United States at the full capital gains rate. Lauder in Palm Beach, Fla., not the one owned Even then, though, CME’s complex corporate by Ronald S. Lauder.