Sophi Finds a Chest Inscribed "Captain Hook" That Contains $500,000

question 37

Multiple Choice

Sophi finds a chest inscribed "Captain Hook" that contains $500,000 of cash while fishing off the shore around New Orleans. The US Customs and the DEA denied knowledge of the cash, so Sophi keeps it.
I.Sophi will not recognize any gross income if the chest contained jewels valued at $500,000, rather than cash at the time of discovery.
II.Recognition is necessary because this is a treasure trove and it is comprised of cash.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Costly Performance

Refers to situations where fulfilling the terms of a contract or agreement involves significant expense.

Government Policy

A deliberate plan of action or inaction chosen by public authorities to address a given problem or interrelated set of problems.

Contract Frustration

Refers to a situation where unforeseen events make the fulfillment of a contract impossible, voiding the obligations of the parties involved.

Government Ban

An official prohibition or restriction imposed by a governmental authority on certain activities, products, or substances.