It can be largely avoided if a cost basis high enough is established on the value when he got it. Considering its value was unknown prior to the auction it would be very difficult to set a cost basis. This auction is the only indication of its value. Thus, his 'gain' may be zero or close to it. With -good- tax help he may be okay.
As most here are aware, the income tax is likely illegal, but one criminal thing about it is that losses on personal property are not deductible but gains on personal property are. Even if these 'gains' are nothing more than numerical due to inflation. 'heads I win, tails you lose'.
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