| Bearer Instrument |
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In general, the legal '' Situs '' of the property is where the instrument is located. Bearer instruments can be used in certain jurisdictions to avoid Transfer Tax es, although Tax es may be charged when bearer instruments are issued. The United States has attempted to deal with tax evasion concerns by requiring a person who accepts a bearer instrument having a face value in excess of $10,000.00 as payment for goods or services in the ordinary course of business to file an information return with the Internal Revenue Service identifying the party who transferred the instrument. Failure to file the required return (Form 8300) is a Felony under federal law. Under the Uniform Commercial Code , a Negotiable Instrument (such as a Check or Promissory Note ) that is payable "to bearer" may be enforced (i.e. redeemed for payment) by the party in possession. This is the letter of the law: in practice many merchants and financial institutions will not pay a check presented for payment by anyone other than the named payee. In earlier times many forms of government issued currency were actually bearer instrument giving the bearer property title to precious metals. SEE ALSO |
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