McCOY V. COMMISSIONER
38 T.C. 841 (1962)
NATURE OF THE CASE: McCoy (P) sued Commissioner (D) when D imposed a deficiency for the
fair market value of a new car P won.
FACTS: P was employed by the Hotpoint Appliance Sales. Hotpoint sponsored an annual
sales contest and distributed awards to the winners. In 1956, P received a new 1957 Lincoln
Capri two-door coupe automobile. At the time of the award, the 1957 Lincoln models had been
on the market about 1 month. The cost of the automobile to Hotpoint was $4,452.54. P drove
it home and went to an authorized Lincoln-Mercury dealer in that city to get an appraisal of
the automobile, the result of which is not disclosed by the record. Within 10 days after
receiving the Lincoln car, P traded it to a dealer for $1,000 in cash and a 1957 Ford
Country Squire station wagon with power equipment, having a dealer's price of $2,600.
Petitioner included in his adjusted gross income for the year 1956 the amount of $3,600 as
the value of the Lincoln automobile. Hotpoint reported the payment of additional
compensation to P in the amount of $4,452.54, which was the cost to it of the Lincoln
automobile. D determined that P had additional income of $852.54, stating that 'the fair
market value of a Lincoln Capri automobile which you received as a prize or award * * * was
$4,452.54 rather than the amount of $3,600 which was included in the income reported in your
return on account thereof.' P sued contesting the deficiency.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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