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Yin and Yang of taxes

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  • Goldilocks
    replied
    We also can deduce from the letter above that the treasure was placed before March 6, 2010 so would've been summer 2009 according to other Fenn quotes. I do think the 10 year reference is important because he has repeated it many times. I believe there is a statute of limitations or something connected to the legality of placement.

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  • Goldilocks
    replied
    Here is a letter from Forrest's attorney (see Exhibit 11). This should clarify some things. Following the lawsuits can be very informative, even if you don't agree with the Plaintiffs.

    https://www.courtlistener.com/docket...rskine-v-fenn/

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  • Old Pilot
    replied
    Originally posted by Goldilocks View Post

    Sure you can, it's called a living inheritance and happens all the time. If you view the poem as a contract then it very well could be an offer of a gift (I give you title for example). Who's to say the Finder has received anything yet? He may not until F's passing.
    This suggests that a "finder" may have to wait a few (or more) years before being able to enjoy the financial benefits of finding/possession of the goodies. I don't think that's what Forrest had in mind.

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  • atticusfinch315
    replied
    Interesting thoughts but that goes for the chest what about the trove? I've always said the property is always Forrest's unless he stole it; therefore, it's his to do as he pleases. The Chase was nothing more then a gratuitous promise. These are generally unenforceable much to BA's dismay. What if the find is much larger then the world realizes...what if Forrest is much more important than stated? What if the poem reveals an underlayment to the very floor of our civilization? Get outside cut the cord! Forrest has a certain philosophy. The poem and books were designed only to interest those that shared it. There is more than one act the chest is only part of it.

    Taxes are a part of it, the Finder ceded control to Forrest. The problem with illiquid treasure troves is your taxed on its value when you take possession even if you can't sell it. Even now it will be difficult to realize a gain before January which puts you in a hobson's choice. (There are artifacts that meet the definition of antiquities. ) There are at least two parts to the story maybe three, like three acts.

    The Finder is struggling with all this but must trust Forrest...in fact that's one of the morals of his philosophy it's in the book. I have always struggled with taxes. Philosophically I thought of a flat tax or consumption based tax ala Steve Forbes or Perot. The problem with tax is that when get right down to it they are cutting our nuts off. Income tax, sales, gas, school, real estate, transfer, permits (for rights), licenses, registrations, fees etc etc...we might as well be dealing with Aggri beads and our money is worthlessly supporting some useless interventionist theory. It never makes its way back to community where it was taken.

    I for once know that someone is trying and there are people that support it. So Forrest go for it! Run your plan without objection. I am sure the finder trusts you.

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  • Tlmlb
    replied
    Originally posted by Indy View Post
    And in case someone wants to argue about the business idea - don't! Fenn would be opening a massive can of worms if he files this as a business expense. All those lawsuits would now be back in play if this was a business and not a treasure hunt in which he abandoned the chest. This can't be anything but abandoned property or else he could have liability issues and his attorneys are smart enough to know that.
    You've just described most any book or movie deal. The liability issues can be handled via the type of entity or purchasing actual insurance. Yeah, there are underwriters out there that would write a policy on this...betcha Lloyd's would be interested. Fenn is probably very familiar with them since he is in the art business and has significant insurable assets.

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  • Tlmlb
    replied
    Originally posted by Goldilocks View Post

    Sure you can, it's called a living inheritance and happens all the time. If you view the poem as a contract then it very well could be an offer of a gift (I give you title for example). Who's to say the Finder has received anything yet? He may not until F's passing.
    The Finder in your scenario does currently get something even if the distribution is in the future. He has gotten an unrestricted and irrevocable right that can either be exercised against Fenn's estate or sold to another party. This really would be the worst of all for the finder....he would have income tax due on an illiquid intangible without the cash to pay the Feds. Don't say that the value can't be determined.....the discounted value based on current interest rates and Fenn's expected longevity based on lfe expectancy actuarial tables. The lower interest rates are and the shorter Fenn's life expectancy makes any discount smaller. Fenn is old and interest rates are low.

    If the promise is revocable then the Chase has been a sham.

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  • Tlmlb
    replied
    It is not an inheritance nor is it a gift. It is no different than winnings from a game show like Jeopardy or Publisher's Clearinghouse. The finder had to actively do something to receive the bounty, solve and go get the treasure. Gift and Estate taxes do not apply. Income taxes are due on the appraised value of the property received. This is the essence of the transaction.
    Last edited by Tlmlb; 07-31-2020, 10:23 AM.

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  • Sherif Billy
    replied
    I find myself going back to Forrest's comments about the matter. I don't recall it exactly but he mentioned an example postulating what if someone leased a cabin and while they were there found a treasure on the property? Then he asked the rhetorical question "Who's property would it be? The fellow who found it or the owner of the land? This is characteristically Forrest Fenn at work. After my daughter and I found the blaze, we noticed how when he would describe what a blaze was; it would always include a blazing fire with all the rest.
    1f

    So it is with the location of the special spot. With knowledge and belief Forrest hid it on property that had a legal easement on. That easement was for an electrical transmission line which is no longer in use by the electrical company. It is my belief that Forrest acquired the rights to the easement once that transmission electrical line was abandoned and Forrest intended to convey title to that easement to the finder.

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  • Goldilocks
    replied
    Originally posted by Indy View Post
    Move onto a new issue.
    First off, there can't be an inheritance because Fenn is not dead; it would be a gift and not an inheritance, but it's not a gift because Fenn abandoned the property and stated so. So now it's a find and not a business deal. The laws for taxes for found items are very clear and all the burden is on the finder to get it appraised and pay the tax. But is he even coming forward? Who knows? If he wants to stay quiet, then even filing taxes would be fraught with risk as someone will blab. Since he has gone the route of staying quiet, then he might be going the route of not paying anything. It's a risky move, but the alternatives are just as risky.
    If one of Fenn's kids had found it, then the IRS might challenge the idea of it being a find, but the IRS is overwhelmed right now with ID theft and dealing with the COVID stimulus payouts and fraud. The last thing they will do is worry about the technicalities of this arrangement. (That assumes the finder pays the ~30% and files his paperwork.)

    And in case someone wants to argue about the business idea - don't! Fenn would be opening a massive can of worms if he files this as a business expense. All those lawsuits would now be back in play if this was a business and not a treasure hunt in which he abandoned the chest. This can't be anything but abandoned property or else he could have liability issues and his attorneys are smart enough to know that.
    Sure you can, it's called a living inheritance and happens all the time. If you view the poem as a contract then it very well could be an offer of a gift (I give you title for example). Who's to say the Finder has received anything yet? He may not until F's passing.

    Leave a comment:


  • Indy
    replied
    Move onto a new issue.
    First off, there can't be an inheritance because Fenn is not dead; it would be a gift and not an inheritance, but it's not a gift because Fenn abandoned the property and stated so. So now it's a find and not a business deal. The laws for taxes for found items are very clear and all the burden is on the finder to get it appraised and pay the tax. But is he even coming forward? Who knows? If he wants to stay quiet, then even filing taxes would be fraught with risk as someone will blab. Since he has gone the route of staying quiet, then he might be going the route of not paying anything. It's a risky move, but the alternatives are just as risky.
    If one of Fenn's kids had found it, then the IRS might challenge the idea of it being a find, but the IRS is overwhelmed right now with ID theft and dealing with the COVID stimulus payouts and fraud. The last thing they will do is worry about the technicalities of this arrangement. (That assumes the finder pays the ~30% and files his paperwork.)

    And in case someone wants to argue about the business idea - don't! Fenn would be opening a massive can of worms if he files this as a business expense. All those lawsuits would now be back in play if this was a business and not a treasure hunt in which he abandoned the chest. This can't be anything but abandoned property or else he could have liability issues and his attorneys are smart enough to know that.

    Leave a comment:


  • Quest
    replied
    Originally posted by Goldilocks View Post
    Why is everyone worried about taxes? Isn't the typical exemption amount $10-11 million for estate/inheritance taxes? It's not considered income when it's an inheritance.
    Actually forrest did state the finder would have to pay taxes. It's the s corp and probably a trust that changes how that occurs.

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  • Goldilocks
    replied
    Why is everyone worried about taxes? Isn't the typical exemption amount $10-11 million for estate/inheritance taxes? It's not considered income when it's an inheritance.

    Leave a comment:


  • Tlmlb
    started a topic Yin and Yang of taxes

    Yin and Yang of taxes

    Some thoughts regarding how Fenn treats the hunt for his tax purposes...and how it will effect the finder

    1. Been rumored that the treasure is in some kind of legal entity....LLC, S Corp etc...I could even see it being organized as a non profit charity to promote nature, tourism, art etc.
    2. My opinion is that this has been a business deal by Fenn from the start to promote and monetize the story of Fenn and the hunt.
    3. Some have opined that the finder is not interested in being involved with the monetization either in a collaborative effort or deals on his own. Kpro's language on YouTube today stated this but she was careful to limit this to the finder and not Fenn. The part not said out loud was that Fenn is all about selling the story etc. This makes sense because Fenn is the one with the true power in the relationship between himself and the finder.
    4. Business expenses of the activity would be reported and deductible on the applicable tax return. Form 1065, 1120S etc. This would include the cost of the treasure that was found.
    5. Funny thing about business expenses, generally somebody's expense is another person's income.....the yin and yang so to speak.
    6. In order to deduct business expenses paid to an individual (over $600) an information return(1099) is filed. Copies are sent to the recipient and the IRS with names of the payer and payee with amounts and tax ID numbers. So there will be most likely a paper trail for tax purposes and evasion is made much harder. Fenn will want to deduct the cost of the treasure and can require the finder disclose his personal information for tax reporting purposes.
    7. Even if the tax forms that need to be filed by Fenn are misplaced there will be tax docs filed by any reputable auction house when the contents are sold to convert the treasure to cash.
    8. I suppose private sales could be arranged without all the paperwork and paper trail. I'm sure that happens all the time in the art business.

    Laundering this will be hard and expensive....the finder may not be sophisticated in these matters.....he will end up paying the tax IMO.....by the way, the IRS has plenty of appraisers on staff and will contract jobs when additional expertise is needed.
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