Hugh, one of your clients, purchased a home in 2015. In the current year, Hugh decided to install an in-ground pool in his backyard. While digging up the yard, Hugh found a metal box containing $100,000 cash. Hugh wants to know if such found property is taxable. In addition, even if found property is taxable, Hugh believes that he should have reported the money in 2015 (the year he bought the house). Consequently, since the three-year statute of limitations has expired on the 2015 taxable period, Hugh thinks he is not required to report the cash as income or pay tax on it. What do you tell Hugh?

a. Hugh will not have to pay any tax on the $100,000 because the money was taxable in the year the house was purchased, and the statute of limitations on the IRSs ability to make an assessment has expired.

b. Hugh will not have to pay any tax on the $100,000 because finding money is considered a nontaxable treasure trove.

c. Hugh will have to pay tax on the $100,000 because the money is taxable in the year the money is found - not in the year the house was purchased.

d. Hugh will only have to pay tax on the $100,000 if he was aware of the possibility that the money was buried, and deliberately chose not the dig it up until after the statute of limitations ended.