Legal Files (71)

"Legal Files” has written several times about various techniques that collectors employ to avoid paying sales/use taxes on their collector cars. It’s a big deal, as the sales/use tax rates are typically 6% to 10% of the purchase price of the car. One of the common techniques, which our office uses with many of our clients, is to form a Montana LLC (limited liability company) to serve as the owner of the collector cars. Under Montana law, a business entity formed in Montana can title and register its vehicles in Montana no matter where they might be located. The titling…
In late March, Frans van Haren and Tony Paalman, Dutch car collectors and business partners, put their 1935 Mercedes-Benz 500K Roadster on display at the Techno Classica car show in Essen, Germany. The two men had bought the car, Lot 147, for $3,767,500, including buyer’s premium, at RM Auctions’ 2011 sale in Monterey, CA. Life was good — until the German police, executing a warrant issued by a local court, seized the 500K on the basis that it had been stolen from its rightful owner in 1945. The two men, who have millions invested in this car, were stunned. The…
Legal Files previously reported about an incident where FBI agents crashed a Ferrari F50 that they had seized (SCM February 2010, p. 26). As amazing as that scene was, the same F50 has been in the news again, and now we know the rest of story.The F50 was introduced in 1995. At 513 horsepower and 2,976 pounds, it represented the latest and greatest of the Ferrari supercars. Priced at around $500,000, Ferrari manufactured only 349 cars—one fewer than Ferrari believed it could sell, which assured exclusivity.Gone in 60 secondsIn 2003, Algar Ferrari in Rosemount, PA, was happy to have an…
He is accused of using over $200m of investor funds to support a lavish lifestyle, including a 70-plus car collection For the past few years, Tim Durham was a well-known fixture at collector car auctions. Arriving on his private jet—and spending freely—he rapidly amassed a significant collection that included Duesenbergs, Ferraris and a Bugatti Veyron.Durham looked like a real rags-to-riches story. He was the product of small-town Indiana beginnings, but he had big designs to become wealthy. He was quoted as wanting to be as wealthy as Warren Buffett and become the richest man in the world. Durham reportedly made…
2010 was a difficult year for tax planning. The federal estate and generation-skipping taxes were repealed, but the gift tax exemption was stuck at $1m to keep people from taking too much advantage. Plus, there was talk all year long about a retroactive reimposition of both taxes. We saw an epic battle over the continuation of the Bush Tax Cuts, which morphed into a battle over the Bush Tax Cuts for the Wealthy–even though no one seemed bothered by the Bush Tax Cuts for the Not So Wealthy, even though they represented 75% of the tax expenditures. The impasse grew…
You may avoid paying sales tax if you ship the car by common carrier to a non-sales-tax state "Legal Files” had a great time at the Scottsdale, AZ, kick-start to the 2011 auction season. Auctions are a popular place to buy your collector car. But to ensure that you are as happy when you get the car in your garage as you were when you were bidding, there are quite a few details that need to be thought through ahead of time.Condition and authenticityAbove all else, be sure that the car you’re buying really is what you think it is.…
Internet buyers think that when the car doesn’t meet their fantasy image they can return it for a full refund, just like sale pants at Nordstrom’s 1940 Ford Deluxe Convertible. Just redone by a well-known local shop. Beautifully restored with no expense spared. All aspects are correct and highly-detailed. Undercarriage immaculate, etc., etc. $58,950.Sound pretty nice? The buyer thought so when he saw this ad in an Internet listing, so he called the dealer, who was located 3,000 miles away. The conversation went well, but ended abruptly when the buyer made what the dealer thought was a lowball offer. The…
It’s not a good day when your mechanic calls and says, “Uh, I’m not sure how to say this, but I had a little accident with your car.” It’s even worse when your car is a 2006 Ford GT Heritage that had been modified to a “Twin Turbo.” (On the Internet, some claim the value of cars like this can exceed $250,000.) This Ford GT had some running problems that were threatening the owner’s participation in an upcoming Ford GT rally. The owner turned to a tuner who was a mainstay on the Ford GT Forum and goes by the…
The High Court in London has recently given judgment in the case of Brewer vs. Stanley Mann, Fortis Lease UK Limited and Stanley Mann Racing Limited. The judgment emphasizes the importance of accuracy when giving sale descriptions of collector cars. The judge’s finding, heavily in favor of the private buyer and against the seller, raises some interesting issues for dealers, auction houses and buyers. This judgment has caused some waves in the U.K. trade, and is already subject to appeal.The factsIn June 2007, London-based vintage Bentley specialist Stanley Mann sold a car which he described as a 1930 Bentley Speed…
In many cases, insurance adjusters say that all they are required to do is fix the damaged parts, which can create a non-matching Frankenstein carPictures of a McLaren F1 that suffered an engine fire were all over the Internet last year. It was an ugly sight—and saddened every car collector who saw it. “Legal Files” is pleased to report that the F1 was saved. In fact, the owner and I just returned from a very suitable shakedown cruise in it through the Scottish Highlands.“Legal Files” had assisted the owner in the acquisition of this iconic supercar. Hours of seat time…