Case-

Myron Wallbanger is the adopted son of the son of Harvey Wallbanger, who is the owner and sole proprietor of Wallbanger Ripple Winery. As a high school graduation present, Myron's grandfather gave him an old roll-top desk which Myron had always admired, which stood in his grandfather's office at the winery. At the time the gift was made, the desk's value was estimated at $200. After the festivities of graduation had culminated, Myron examined the desk, and, hidden in a secret drawer of the desk, he found the formula for the manufacture of Wallbanger Ripple. This formula had been preserved as a closely guarded family secret, and was handed down from generation to generation in the Wallbanger family. Its value at this point in time was estimated at $100,000. Myron read and memorized the formula, and then returned it to its hiding place in the desk and proceeded to enter upon his college career. Much to his surprise, shortly after receiving the desk, Myron discovered that it was a rare antique with a value of $10,000.

College, at least the financial part, was not burdensome to Myron since, as an excellent basketball player, he received an athletic scholarship from Western University. Western, was the state university of a nearby state, and had always been known for the fine quality of its basketball team. , The scholarship covered his room, board and books for all his years in college, and was conditioned on his playing basketball if requested by the Western basketball coach. In addition, each recipient of an athletic scholarship was considered a resident of the state, and, therefore, his tuition was $900 a semester, rather than $4,900 a semester. Fortunately, Myron joined R.O.T.C. at the university, and obtained an R.O.T.C. scholarship to cover tuition.

With his financial worries behind him, Myron married Mildred after the first basketball season. During his third year in college, Myron's grandfather died. When his grandfather's will was read, it directed Myron to look in the hiding place in the roll-top desk and stated that what he found there would constitute his grandfather's bequest to him. In addition, grandfather left $20,000 to the first of his grandchildren who produced a male heir. Fortunately, Mildred was pregnant at the time of grandfather's death, and, within three months thereafter, Myron not only collected a tax exemption, but also $20,000. Since Wallbanger Ripple had fallen upon hard times at the time of grandfather's death, the secret formula would have been valued at about $40,000 at this time.

On graduation from college, Myron was named one of the ten top scholar-athletes in the country, and received a $5,000 award from the Wilt Chamberlain Foundation. Honoring his commitment to R.O.T.C., Myron entered the Marine Corps. Upon his discharge from the Marine Corps, Myron, preserving his all-American boy image, put in four years with the Boston Celtics. On leaving the Celtics, Myron purchased from them a life insurance policy in the face amount of $1,000,000, that the Celtics had taken out on his life, since he was a valuable member of the basketball team. He purchased it for the premiums which had been paid to this point, $200,000, and he made Mildred the beneficiary. The cash surrender value of the policy at this point in time was $160,000. After separation from the Celtics, Myron began to work for Wallbanger Ripple Winery, and eventually changed the form of the business to that of a corporation, became president and chairman of its board and caused the corporation to sell 49% of its stock to the public, leaving the balance of the stock in Myron's hands. After many prosperous years guiding the destiny of Wallbanger Ripple, Inc., Myron decided to retire. Quite to Myron's surprise, upon his retirement, the board of directors of the corporation, in appreciation of the guidance and good fellowship of Myron, granted him a retirement bonus of $350,000, payable in seven equal annual installments of $50,000 a year. A few years later, Myron passed on to the great winemaker in the sky, and Mildred elected the day before Myron died to collect the proceeds of the insurance policy referred to above, in equal annual installments of $150,000, as long as she should live.

Obviously, Myron had a number of income tax problems during his life. If you had been his attorney, how would you have advised him to handle those problems?