Something was bothering my friend Professor Brendan Cunningham (Horolonomics) and me — and likely other enthusiasts — as we paged through the Phillips Game Changers catalog: why were there no public estimates for the two highlights of the auction, the Marlon Brando GMT and the Jack Nicklaus Day-Date? Both of these watches with celebrity provenance, hyped as much as any in the past few auction seasons, had estimates that simply read “available upon request.” Of course, it’s impossible to estimate the value of a one-of-a-kind watch with celebrity provenance, but is there something more to it than that? [Ed. note: after the publishing of this article, Phillips made public the estimate for Jack Nicklaus’ watch, setting it at $100,000 to $200,000; I believe — and many would likely agree — that this is a laughably low estimate and probably substantiates the conjecture of this article.]

One potential explanation? Taxes.

As it turns out, these watches have more in common than just their celebrity provenance: proceeds from both watches will go to charity.

Per the Phillips catalog, 100% of the proceeds from Jack Nicklaus’ Rolex Day-Date will directly benefit the Nicklaus Children’s Health Care Foundation. In his post-golf years, Nicklaus and his wife, Barbara, have become as known for their philanthropic efforts as for the Golden Bear’s storied golfing career.

Meanwhile, a portion of the proceeds of the sale of Brando’s GMT will assist The Brando Fischer Foundation, a charitable foundation established by Petra (Brando’s daughter, to whom he originally gifted the GMT) and Russel (Petra’s husband), which will provide financial support to children who are living through serious hardship due to abuse, neglect, poverty, or disability.

According to the IRS, donors (i.e., auction bidders) who purchase items at a charity auction can claim a charitable deduction for the excess of the purchase price on an item over its fair market value. All the donor has to do is show that he or she knew the value of the item was less than the amount paid. For example, if an auction house publishes an estimate in a catalog, that estimate can serve as a good estimate an item available for bidding. Assuming the donor has no reason to doubt the estimate, the donors can then point to auction estimates as their basis come tax season.

My cynical conjecture is that auction houses actually have very low estimates on the watches that they don’t want to make public. That way, this low estimate can serve as the buyer’s basis come tax season and they can claim an artificially high tax deduction. But, auction houses also don’t want these low estimates to anchor potential bidders to these artificially low estimates for pieces which truly are one of a kind. So, they keep the estimates private.

This guess may be a bit dubious, as only a “portion” of the proceeds of Brando’s GMT will go to charity, and thus not even eligible for a deduction, while the entirety of the sale of Nicklaus’ Day-Date is set to go to his foundation. Interestingly, Paul Newman’s Paul Newman, which sold in 2017, did have an estimate of $1 million to $2 million attached to it. Like the Brando GMT, only a “portion” of the proceeds of that sale went to charity.

For more on the Phillips Game Changers Auction, check out our preview.