McCoy v. Commissioner

Lawrence McCoy (plaintiff) won a sales contest and received a new car from his employer that the employer had bought less than a month earlier for $4,452.24. After receiving the car, McCoy drove it on a long trip and later had it appraised for less than that purchase price, eventually selling it for $1,000. McCoy included $3,600 in his gross income, reasoning that was the car's fair market value when he received it, since a new car's resale value drops even before any use. The Commissioner of Internal Revenue (defendant) determined McCoy's gross income should instead reflect the full price the employer had paid, and McCoy petitioned the Tax Court to challenge that determination.