Seven Easy Ways to Avoid Trouble

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

Who Owns This Ferrari Testa Rossa?

“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.

Is It Time to Give Your Cars to Your Kids?

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

Durham Found Guilty of Financial Fraud

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

So You Want to Sell Your Car at Auction

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

Other States Sniping at Montana’s Magic Bullet

“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

Was this Mercedes War Booty?

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 Read More

The FBI Crashes an F50—The Sequel

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 Read More

Tim Durham: From Rags to Riches to Ripoff?

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 Read More

Special Tax-Planning Window for Car Collectors

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 Read More

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