Bruce <bnelson[at]sptaxlaw.com> wrote:

- quote -

What if he had offered for sale the piano as purchased,
including the old currency, and somebody had paid $5,000 for
it? Would that mean they had $4,985 in capital gains?

Seth

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The most often cited court case on treasure trove (that is
found in almost every law school textbook) is Cesarini v.
United States, U.S. Dist. Ct., 296 F. Supp. 3 (1969). The
Cesarini's purchased a piano at a garage sale in 1957 for
$15.00. In 1964, while cleaning the piano, they found
$4,467.00 in old currency inside. They exchanged the
currency at the bank, reported it as income, and filed for a
refund. They claimed that (1) it was not income; and (2) if
it was income, it was income in 1957 (conveinently out of
statute) not 1964, and finally, if it was income in 1964, it
should be taxed as capital gain income. The taxpayers lost.
Nevertheless, the case makes for interesting reading and
addresses many of the issues raised here.

--
Bruce

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