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Wednesday, November 13, 2013

Tax Exam Question: Rabbi Finds $98k in Desk Bought on Craigslist for $150

For those who teach Cesarini v. United States in the federal income tax course:

(Hat Tip: Ann Murphy.)

http://taxprof.typepad.com/taxprof_blog/2013/11/tax-exam-question-98k-found-in-desk-bought-on-craigslist-for-200.html

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Comments

I don't think this is treasure trove in the Cesarini sense. The sale via Craigslist is distinguishable from a sale at auction in that the parties to the sale are known to one another. Also, under routine contract law, the unintended presence of the cash in the desk was a mutual mistake of material fact. The buyer did not obtain unfettered possession of the cash.

Posted by: Jake | Nov 13, 2013 10:34:20 AM

Had he kept the money it would certainly have been taxable. Unfortunately for him, Connecticut and Jewish law require that he return it:

–Conn. Gen. Stat. §50-10 states, “Any person who finds and takes possession of any article of the value of one dollar or more shall report the finding of such article to the police department of the municipality in which he finds such article within forty-eight hours from the time of such finding. The finder of such article shall, at the time of reporting, furnish to the police department the date, time and place of finding, his name and address and a description of the article found, and, within a period of one week from such finding, shall deliver such article to the police department.”

–The Talmud (Bava Meziah 31) teaches that when the identity of the true owner of found property is known, or can be determined without great effort, the finder must return it to its rightful owner.

Posted by: Andrew | Nov 13, 2013 3:33:20 PM