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tax purposes, the gold coins he received should be valued at
their legal tender face value amount of $50. Respondent argues
that the gold coins received by petitioner have a fair market
value far in excess of their face value. Thus, respondent
contends that for purposes of determining the amount realized
from the sale pursuant to section 1001, the coins received must
be classified as "property" rather than "money". For the reasons
discussed below, we agree with respondent.
Section 1001(b) provides that the amount realized from the
sale of property "shall be the sum of any money received plus the
fair market value of the property (other than money) received."
The first issue we must decide is whether the coins received by
petitioner from sale of timber to C&D are classified as "money"
or "property (other than money)" within the meaning of section
1001(b). If the coins are money, then their face value
determines petitioner's income from the sale of timber; however,
if the coins are property, then their fair market value is used.
Coins which are not currently circulating legal tender are
property to be valued at their fair market value for purposes of
section 1001(b). California Fed. Life Ins. Co. v. Commissioner,
680 F.2d 85 (9th Cir. 1982), affg. 76 T.C. 107 (1981); see also
Lary v. Commissioner, T.C. Memo. 1987-169. This result is
unaffected by the fact that such coins may still be used as legal
6(...continued)
lumber.
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