Of all of the blog joints in all the towns in all the world, you had to click onto mine… Yeah, I know it’s bad but I couldn’t resist. It’s Casablanca. How can I be expected to write about a movie with such a classic line and not butcher it somehow?
Today, I’m tackling the 1943 Oscar winner for Best Picture: Casablanca. The movie also picked up awards for Directing for Michael Curtiz and Adapted Screenplay for Julius J. Epstein, Philip G. Epstein and Howard Koch. It is consistently ranked by the American Film Institute as one of the top movies of all time. And it’s one of my favorites. I, like almost every other woman in America (and men, too, admit it) bawled like a baby the first million times that I watched it.
The Background
The movie focuses on Rick Blaine (played by Humphrey Bogart, an Oscar nominee for the film), a cynical American expatriate living in World War II Casablanca. Blaine owns Rick’s Café Américain, the most popular nightclub in the city.
We don’t know much about Blaine to begin with – he keeps his secrets close. We do know that he claims that he cannot return to the United States but the reason is not clear.
From a tax perspective, it’s important to remember that US citizens who do not renounce their citizenship are still required to file and pay taxes on their worldwide income – this would include salaries, gambling winnings (since Rick’s Café Américain is a gambling club) and earnings from business investments. Foreign tax credits are generally available for those that must pay taxes to a foreign government. Certain countries have tax treaties that may override these provisions or exempt certain income; however, the US did not enter into a tax treaty with Morocco until 1977.
The Letters
Things are shaken up when Ugarte (played by the ubiquitous character actor Peter Lorre) arrives in Rick’s club with “letters of transit” that he obtained by killing two German couriers. These letters are valuable because they allow free transit within Europe. This means that those stranded in Casablanca due to the war can travel to a neutral port and thus, enter the United States. Ugarte expects to sell the letters for loads of money. I am not sure how Morocco taxes “ill gotten gains” from crimes, but if Ugarte resided in the US or had been a citizen of the US, he would have been responsible for reporting the income from the sale of the stolen property on his tax return.
Unfortunately for him, Ugarte is arrested by Captain Louis Renault (played by serial groom Claude Rains), who eventually has Ugarte killed. Renault is working with the Germans – more or less. He believes that Ugarte is in possession of the letters; what he doesn’t know is that Blaine is holding the letters for safekeeping. Merely holding the letters does not make Blaine the owner for tax purposes – he’s acting more like a trustee. There are, therefore, no tax consequences to him for retaining possession of the letters.
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