One unexpected consequence of today’s hot collector car market has been that many SCMers have been buying and selling more cars more quickly than ever before. They — and their accountants — have wondered if they have crossed the line from a collector to a dealer, which would carry some significant tax and legal consequences.
All states require car dealers to be licensed. The most obvious consequence of dealer licensing is the cost. Not only do you have Read More
Earlier this year, Portland, OR, residents Rick and Jackie White were stunned to find a very technically worded legal notice in their mail. A lien service company was informing them that a local towing company was auctioning off their 1970 ’Cuda to satisfy its unpaid storage bill.
They weren’t stunned because of the substantial unpaid bill. They were stunned because the Hemi ’Cuda had been stolen in 2001, and they had given up on ever finding it.
Rick White ordered Read More
Two recent cases that attracted a lot of attention seem to involve different issues, but they actually have a lot in common. In one, SCM and ACC contributor John Stein brought to our attention a recent fire in a Sacramento repair shop that destroyed a number of Porsches. In the other, SCMer Joel Gardner shared a very lengthy Internet chat-board thread about a Ferrari FF that was damaged while being driven by a dealer’s employee.
The Sacramento shop Read More
Several years ago, “Legal Files” reported about the litigation surrounding 1954 Ferrari 375 Plus, s/n 0384AM (October 2010, p. 30). The 375 Plus, one of six made, was well-known in the hands of Jack Swaters, the Belgian former race driver and Ferrari importer.
Karl Kleve, an atomic scientist who worked on the Manhattan Project, claimed that the 375 was stolen from him. Both men have since died. Kleve’s position passed to his daughter, Kristine Kleve Lawson in 2003, and Swaters’ Read More
Last month’s Legal Files suggested that there are epidemic proportions of “matching-numbers” Corvettes (and other cars) that really aren’t matching-numbers cars.
That attracted a lot of attention and comments, but what people say is not as important as what they don’t say. No one said the suggestion was sometimes wrong.
First, let’s put “matching numbers” into perspective. Say we have a 1965 Pontiac LeMans with a 4-speed transmission. We source a correct 1965 Pontiac 389-ci GTO motor, a Tri-Power setup, Read More
“Joe” wanted to get into the collector car hobby. After kicking a lot of tires and spending many hours on the Internet, he came across a Southern California dealer offering a car that he had always wanted — a 1962 Corvette Roadster. The car was a matching-numbers example with 48,000 miles, a 327-ci, 360-hp engine, factory fuel injection and a 4-speed. It also looked great in Tuxedo Black. He went to the dealer, test-drove the car, and thought it fit Read More
We thought it was odd that our client’s Mercedes-Benz dealer was threatening to sue him for wrongfully exporting his car in violation of his agreement that he would not do so, exposing him to substantial liquidated damages. As we got into the case, we learned that this was a really big deal across the United States.
Luxury-car manufacturers (Mercedes-Benz, BMW, Land Rover, Porsche and Lexus) are worried about a growing U.S. cottage industry that buys their new cars in the Read More
We recently reported on the status of a lawsuit involving the Briggs Cunningham Corvette, which is ongoing (December 2013, p. 40 and January 2014, p. 42). Domenico M. Idoni, one of the plaintiffs in that case, is now the plaintiff in another lawsuit involving another Corvette, the “Real McCoy.” That’s either bad luck or quite an appetite for litigation!
The story is taken from the parties’ court filings.
The Real McCoy is a 1956 Chevrolet Corvette SR prototype that Chevrolet Read More
The 2014 Scottsdale auctions showed that many collectors are taking advantage of the hot market and selling cars for record prices. But many of those collectors are also learning that we are in an era of high income tax rates.
So, how can collectors minimize the tax costs?
Basic tax principles
Let’s start with some basic principles. The gain on the sale of your collector car is the difference between your net sales price and your income tax basis.
Your Read More
An SCMer wrote asking about potential liability if he sells his vintage Formula One car and the buyer is later injured as a result of a defect in the car. He knew he could clearly state that the car was being sold “as is” but wondered if that would be sufficient.
He was particularly concerned because vintage parts are not readily available and often have to be built from scratch, creating greater risk of design and manufacturing defects.
One’s first Read More