Was it an engagement ring or a holiday gift? 2 - What legal significance is there to how the gift is classified? 3 - Is Nicolette legally obligated to return the ring to Charles on demand

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter7: Deductions And Losses: Certain Business Expenses And Losses
Section: Chapter Questions
Problem 22CE
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Charles and Nicolette went to Italy in November 2008, where Charles proposed marriage and presented Nicolette with a diamond ring. She accepted the proposal and the ring. On the same day, Nicolette asked Charles where he had purchased the ring. She became disappointed when he told her where he bought it, and she gave him back the ring, suggesting a different style she would like. He returned the ring to the jeweler and received a refund of $5,000. He then purchased a new ring for $12,000. Charles testified that near the end of November he “reproposed” and presented the second ring to Nicolette. The relationship soon soured and in late February 2009 Charles asked for the return of the ring. Contrary to Charles’ testimony that he gave the second ring as an engagement ring in late November, Nicolette testified that he gave the second ring to her a few days before Christmas as a holiday gift

1 - Was it an engagement ring or a holiday gift?

2 - What legal significance is there to how the gift is classified?

3 - Is Nicolette legally obligated to return the ring to Charles on demand? 

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