While dining on his half dozen clams on the half shell at one of his favorite local restaurants in Cape May, New Jersey, Mike Spressler thought he had cracked one of his molars. Fortunately for him, not only would he not have to spend thousands of dollars on a new tooth … that hard object in his mouth turned out to be a large pearl that could actually bring him thousands of dollars.1
Not only is this great news for Mr. Spressler, and likely the restaurant that will undoubtedly revamp their whole advertising campaign to highlight their “lucky clams,” it turns out it’s also a win for the U.S. Treasury. Found treasure, not surprisingly, is subject to tax. (Treas. Regs. §1.61-14(a))
And for those who want to dig into this clam treasure a little deeper, the treasure must be reported in the year “found.” So taxpayers who found $5,000 stashed away in a piano they had purchased seven years earlier were required to report the treasure in the year the money was found (not in the year they took possession, which would have put them past the statute of limitations to report).2
Luckily for Mr. Spressler, he didn’t swallow the pearl, so the “date of discovery” was not an issue.