Your client, Phil, is a serious collector car enthusiast. He owns more than 20 collector cars worth
Question:
Your client, Phil, is a serious collector car enthusiast. He owns more than 20 collector cars worth more than $25,000,000. He also likes to buy cars, hold them and sell them when they appreciate in value. At a recent auction, Phil purchased a NASCAR race car which had been driven by the 1998 NASCAR champion.
Prior to the auction, the car was value at $110,000. When the bidding began, the car's owner announced that all of the proceeds from the sale would be donated to a New Mexico animal shelter which is an IRS approved charitable organization. Phil is also a philanthropist and animal lover. Because the proceeds would benefit the animal shelter, Phil bid $253,000, $143,000 more than the car's value.
Phil is now asking for your advice on whether he can claim a charitable contribution deduction and, if so, how much. Phil's estimated AGI for this year is $840,000.
He is also concerned that he retain an appropriate basis in the car for resale gains purposes.
Assignment:
Using Nexis Uni (See Video "Using Nexis Uni - Short Video" in Content>Student Resources) and other online tax resources (e.g.,www.irs.gov) and research the applicable law and then submit a brief memorandum addressed to Phil, in which you report the law and provide advice and a conclusion for Phil.
Identify the relevant statutory, regulatory, and other judicial authorities as discussed in those resources and discuss how these authorities affect your conclusion.
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr