A Ferrari owner was in deep financial trouble. Business difficulties had left him pretty well broke. Worst of all, he owed the IRS more than $3 million, and an IRS agent was hot on his heels to collect.
In need of cash, the owner approached his bank for a loan. Since the IRS had filed liens for the unpaid taxes, the bank required collateral to secure a line of credit. All that was available was the 2005 Ferrari, so Read More
On April 28, Publisher Martin hosted the Round Fendered Volvo Club at his home for a viewing of the movie “Swedish Auto.” A few days later, a club member who drove his Volvo 122 wagon to the affair wrote this interesting account of the demise of his Volvo. “Legal Files” has added comments — with the club member’s permission.
I was driving on a one-plus mile stretch of residential road in Portland, OR. I was at the 25 mph Read More
Last month’s “Legal Files” illustrated how loaning your car to another can wreak havoc at the highest levels. This month, we’ll explore some more mundane situations that can be equally unsatisfying.
Let’s start with a pretty common situation — you and your friend enter a rally in your 1957 Porsche Speedster. On the second day, you trade places and your friend drives. While you’re trying to figure out where you took the wrong turn and how to get back on course, your friend gets distracted, misses a turn and crashes into a tree.
Fortunately, you both escape injury, but your Speedster doesn’t. Your friend apologizes profusely, accepts responsibility and promises to have his insurance carrier take care of the damage. How’s that going to work for you?
Sports car racing driver David Piper (a former F1 driver who lost a leg below the knee in an accident driving a Porsche 917 during the filming of Steve McQueen’s 1971 film “Le Mans”) recently won an important case in The Royal Courts of Justice in London.
The high court awarded damages and legal costs likely to be around $175,000 against automotive journalist and racer Mark Hales, who was stunned and angered with the judgment.
In his written response Read More
Okay, it’s March, but we all know that spring is the real start of the car collecting year. And every new year marks the time for self-improvement resolutions. Here are the top seven for the car collector.
I won’t buy a car online without seeing it myself
Hands down, the most common complaint I get from clients and readers is that they bought a car long distance and, when it arrived, it didn’t turn out to be anything like Read More
“Jim” thought he had a smoking deal — $3,650,000 for a 1956 Ferrari 500 Testa Rossa. He thought he could easily flip the TR for a quick profit. All he needed was $3,650,000.
So, Jim called his stepbrother-in-law, “Bob,” for financial help. Bob thought the TR deal sounded like a good idea, so he contacted his bank, which agreed to loan the $3,650,000 against the Ferrari.
According to Bob, Jim advised him to run the transaction through a shell company. The shell company borrowed the $3,650,000 from the bank, and the bank secured the loan with a security interest in the TR, which it perfected by filing with the Oklahoma UCC filing office.
In the realm of estate planning, 2012 is either a once-in-a-lifetime tax-saving opportunity or the new normal.
We won’t know which until after the November 2012 election — and maybe not until next year, after the new Congress has had time to act. Savvy investors aren’t waiting to find out, and they are acting now to take full advantage of today’s opportunities.
The main point of interest is the estate and gift tax exemption. It has been rising steadily Read More
Tim Durham (right) arrives at court in Indianapolis in June to hear the verdict in his trial
Tim Durham started out as an attorney, then left practice for far greener pastures. Highly ambitious, he reportedly made millions through leveraged buyouts. He 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 also Read More
Finding an auction company that meets your needs is one of the first crucial steps
“Legal Files” recently wrote about the 1935 Mercedes-Benz 500K Roadster that German authorities seized on a claim that it had been stolen from Hans Friedrich Prym in 1945 (June 2012, p. 30).
The current owners, who bought the car at the 2011 RM Monterey auction, were very confident that the claims would be summarily dismissed. Surprisingly, the German court recently ruled that the Prym family had Read More
“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 Read More