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partnership, the partnership’s right to receive the lottery
payments must be assigned a value. Sec. 20.2031-3, Estate Tax
Regs.
The sole issue for our consideration is whether the
partnership’s right to a fixed stream of lottery payments should
be valued using the annuity tables in section 20.2031-7, Estate
Tax Regs. As an initial matter, the estate argues that the
partnership’s right to receive lottery payments is not an
annuity. Respondent argues that the partnership’s right to
receive lottery payments is an annuity which must be valued using
the annuity tables. At the time the petition was filed in this
case, that question had not been addressed by this Court.
However, the question of whether lottery payments should be
treated as an annuity was recently answered in Estate of
Gribauskas v. Commissioner, 116 T.C. 142 (2001), a case involving
substantially similar circumstances to those before us.
In Estate of Gribauskas, the decedent and his former spouse
won a Connecticut Lotto prize. Within a year after winning the
lottery they divorced, and soon after, the decedent died owning
the right to receive half of 18 annual, unassignable,
nontransferable payments that could not be distributed in one
lump sum. The estate elected an alternate valuation date of
December 3, 1994.
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