Celebrity Shopping Sprees: Annie Leibowitz

The Gay Tax Excuse as the cause is a myth

Some claimed that the reason for why Annie got into financial trouble was because Annie’s lover, Sontag, bequeathed properties to Leibovitz who then had to pay 50% of the value in taxes, seeing as they were gay and legally unmarried.

That wasn’t true. With the exception of four items of only sentimental value, the bulk of Sontag’s estate went to David Rieff, Sontag’s only child.

So after that’s cleared up…

Her mortgages racked up

She used to live modestly, and then started buying expensive property.

Leibovitz, like so many Americans during the boom years, had been taking out additional mortgages, heaping loan upon loan and the mortgage debt on all her properties totaled about $15 million.

• In 1994, she bought the Chelsea penthouse in London Terrace
• In 1996, she acquired the Rhinebeck estate and converted it into a sprawling country home
• In 1999, for $2.1 million, she purchased a 14,000-square-foot auto shop on West 26th Street, a five-minute walk from her Chelsea apartment, and built it into a state-of-the-art photo studio
• 2 adjacent Greek Revival–style townhouses on 11th Street near Greenwich Street in 2002 and immediately began converting them into a single residence.

With these Greek Revival-style townhouses, she tried to stick to a half a million dollar budget, but the expenses blew out of control when she wanted to add a sub-basement with a higher ceiling.

When they dug the sub basement, they accidentally destroyed a young family’s home next door and she had to buy their home for $1.87 million.

And so did the bills from the tax men..

Federal records show that Leibovitz owed a total of $2.1 million in unpaid taxes for tax years 2004, 2006 and 2007.

She also had New York state tax liens of $247,980 for six years, including $135,915 in 2007.

And she owed New York City several thousand dollars for three years.

She wasn’t making as much as people thought

She was clearly spending beyond her means, with a bit of a celebrity complex.

“Photographers aren’t professional athletes, recording artists, or supermodels,” the source says. “Compared to 99 percent of the world, she makes a vast fortune. The problem occurs when a person becomes so famous that they start feeling that they’re more in line financially with Oprah or Madonna.”

MYTH: People spoke of a fabled “contract for life” from Condé Nast, thought to bring her as much as $5 million annually.

But it was apparently pure fiction and the contract is actually $2 million a year, and only until 2011.

MYTH: She was said to earn a day rate of $250,000 just to set foot in a studio for an advertising job for clients like Louis Vuitton.

It’s apparently not even half that.

And she wasn’t concerned with the practicality of bills & money

She could have been paid $100,000 price tag for commissioned portraits (a la Andy Warhol), but she was too flaky to deal with.

She could refuse the job, not schedule for years, or cancel at the last minute.

She acted as if the fine-art market was somehow below her, and not worth the effort.

All she had to do for example, was sign some prints. Someone who had paid for a print, and wanted it signed, may not get it for 2 years, because of how long she took to get around to signing them.

She also avoided and changed scheduled meetings and calls, delaying up to 16 months.

Her lifestyle was passionate and lavish

“She’s a massive perfectionist,” Brown says, “and absolutely doesn’t care about the impact on her own bottom line.”

Her lover Sontag also enjoyed sharing Leibovitz’s high-priced life; using her housekeeper, personal chef and living in all the places Annie purchased.

She even spent $800 in shipping charges alone via special customs courier to buy a seat on a plane to put a parcel of 2 black journals flown in from Stockholm’s stationer Ordning & Reda just so she could have the exact, hand-crafted notebook to record all the bowel and eating movements of her daughter.

And so were her bloated work expenses

Photographers are like consultants: typically paid a fee for their work, plus expenses, which is a specific budget they cannot go over.

She paid no attention to budget restrictions, and she spent money recklessly, losing cameras, accruing parking tickets, and even abandoning rental cars.

She was forced to deal only with cash, but got a credit card after she lost an envelope with several thousand dollars in a phone booth during a shoot.

She is generous without being practical

“She wanted her life to be like a magazine spread,” Kellum says. “Everything beautiful, nothing out of place. She wanted everything to be perfect.”

Leibovitz was also famously generous with her family.

“If I was in a bookstore with my sister, I would be afraid to even look at a book,” says Leibovitz’s younger sister Paula. “If I even looked at it, she’d turn around and buy it for me.” When Marilyn Leibovitz was diagnosed with terminal cancer in 2007, Leibovitz rented her a house on the ocean so she’d be able to hear the same surf she heard as a child summering on the Jersey shore.

And she never managed to pay vendors on time

Traditionally Leibovitz would submit claims to Condé Nast or an advertising client to cover her expenses.

The client would then reimburse her, and she would pay her vendors.

But she never paid her vendors.

According to a person familiar with the situation, after Leibovitz failed to pay hundreds of thousands of dollars she owed Box Studios, an elite postproduction company, they insisted on billing Condé Nast directly.

Bottom line: She cannot afford to “retire”

She has to work.

She has debts to pay.

Sources

• NY Mag