119 T.C. No. 1
UNITED STATES TAX COURT
JAMES F. DAVIS AND DOROTHY A. DAVIS, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 6389-01. Filed July 3, 2002.
Ps assigned to S their right to receive a portion
of each of certain future annual lottery payments in
exchange for a lump-sum payment to them by S of
$1,040,000.
Held: S paid Ps a lump-sum amount for the right
to receive certain future ordinary income. Held,
further, Ps’ right to receive certain future annual
lottery payments does not constitute a capital asset
within the meaning of sec. 1221, I.R.C. Held, further,
the $1,040,000 that Ps received from S is ordinary
income.
Donald J. Gary, Jr., for petitioners.
Thomas J. Fernandez, for respondent.
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