Ravi,an Art Collector,had Been Made a Standing Offer by a Gallery

question 21

True/False

Ravi,an art collector,had been made a standing offer by a gallery to purchase one of his paintings for $150,000.At shows and luncheons of the art community he had previously rejected the entreaties,knowing the painting to be worth at least twice as much.On the latest occasion of a luncheon at which Ravi was deliver an art commentary to the guests,the gallery made its offer once more.To himself,Ravi considered the offer and concluded he could use the charitable tax relief that such a sale at a loss would generate.In the course of his speech,he acknowledged and accepted the offer.Two days later,Ravi's lawyer advised him that the purchasing gallery was NOT a charitable foundation,and no tax deduction for such a "donation" could be expected.Ravi then refused to sell the painting to the gallery.On the strength of the verbal agreement of purchase and sale made in the presence of witnesses,the gallery sued Ravi for breach of contract,and for a decree of specific performance to compel Ravi to sell it the painting.Ravi may successfully plead the Statute of Frauds as a defence.

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Definitions:

Tax Liability

The total amount of tax that an individual, corporation, or other entity is legally obligated to pay to a taxing authority.

Single Person

An individual who is not married or in a romantic relationship that is formally recognized, especially with reference to legal or social status.

Full-Time Student

A status for individuals enrolled in a higher educational institution with a full course load, impacting tax credits and dependency status for taxes.

Personal Exemption

A deduction allowed by the IRS for the taxpayer, the spouse, and eligible dependents, significantly reduced and effectively eliminated with the Tax Cuts and Jobs Act for tax years 2018 through 2025.