Kathleen Pender Updated 7:09 am, Friday, February 28, 2014 EST
Couple's gold discovery will be taxed at top federal rate
The Gold Country couple who unearthed at least $10 million worth of 19th century gold coins in their yard last year will probably owe close to half of that sum in federal and state income tax - whether or not they sell the coins.
There is no question that the discovery of the coins is a taxable event. In a famous 1969 decision, a U.S. District Court in Ohio ruled that a "treasure trove" is taxable the year it is discovered. In that case, Cesarini vs. United States, a couple bought a used piano in 1957 for about $15. In 1964, they found $4,467 in old currency inside it.
The court ruled that the money constituted ordinary income in 1964, the year in which they had "undisputed possession" of the funds. It did not qualify for the lower capital gains tax rate because neither the piano nor the currency were sold or exchanged.
In its 2013 tax guide, the IRS states, "If you find and keep property that does not belong to you that has been lost or abandoned (treasure-trove), it is taxable to you at its fair market value in the first year it is your undisputed possession."
PUBLISHED: 17:15 GMT, 28 February 2014 | UPDATED: 20:58 GMT, 28 February 2014
The Northern Californian couple who found $10 million worth of gold coins on their land could have broken California Law for failing to report their stunning discovery to police, it emerged today.
The mystery pair discovered the haul at their property in the Gold Country while out walking their dog. They stumbled across 1,427 rare, mint-condition gold coins, nearly all dating from 1847 to 1894, buried in the shadow of an old tree on their ranch in February 2013.
They have so far managed to remain anonymous despite worldwide media attention and fascinated locals desperately searching to uncover their identity.
The face value, of what’s being called the ‘Saddle Ridge Hoard’, added up to about $27,000, but some of the coins are so rare that experts say they could fetch nearly $1million apiece, and are being sold by Amazon in a special deal in May.
But, according to Californian Law, the couple should have declared their findings to the police within a ‘reasonable time’ of finding it.
The Californian Civil Code, sub-section 2080, also states that a notice must go in the local paper if the haul is worth more than $250.