The taxpayer is an antiques collector and is going to sell an antique purchased many years ago for a large gain. The facts and circumstances indicate that the taxpayer might be classified as a dealer rather than an investor in antiques. The taxpayer will save $40,000 in taxes if the gain is treated as long-term capital gain rather than as ordinary income. The taxpayer is considering the following options as ways to ensure the $40,000 tax savings.

Give the antique to his daughter, who is an investment banker, to sell.

Merely assume that he has held the antique as an investment.

Exchange the antique in a like-kind exchange for another antique he wants.

One of the tax preparers the taxpayer has contacted has said that he would be willing to prepare the return under the second option. Would you? Why or why not? Evaluate the other options.