Friday, June 2, 2006
The owner of the Augusta Hills Golf Course in Albion, Indiana is employing an unusual strategy to fund his retirement: he is holding a closest to the pin contest on the par 3, 130-yard 15th hole. Under the contest rules:
- Entry fee: $1,000
- Minimum number of entires: 1,500
- Maximum number of entries: 2,500
- Winner receives:
- 18-hole golf course
- maintenance building
- storage building
- equipment (including 30 golf carts)
- no debt on the property
- Entry deadline: August 1
- Contest begins: September 5
Tax issues abound:
- Ordinary income of $1.5 - 2.5 million?
- Capital gain after basis offset?
- Ordinary income of fmv of course - entry fee?
- Acquisition of course for $1,000, which becomes basis in the property?
- Non-winning participants:
- Any way to deduct the $1,000 entry fee?
For press reports, see the Indianapolis Star. (Hat Tip: Joshua P. Hollingsworth.)