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tions, all payments are subject to appropriate Federal
tax withholdings. Deductions authorized by California
statutes, if such are appropriate, will also be made.
Your rights under this agreement cannot be assigned,
but all remaining rights do become a part of your
estate. This document is not negotiable.
On June 16, 1997, at a time when petitioners3 were entitled
to receive 14 future annual lottery payments of $679,000 (less
certain tax withholding) during the years 1997 through 2010,
petitioners and Singer Asset Finance Company, LLC (Singer),
entered into an agreement pursuant to which, in exchange for a
lump-sum payment to petitioners by Singer of $1,040,000, peti-
tioners assigned to Singer their right to receive a portion
(i.e., $165,000 less certain tax withholding) of each of 11 of
the future annual lottery payments that they were entitled to
receive during the years 1997 through 2007. (We shall refer to
the foregoing assignment as petitioners’ assignment.) Petition-
ers thus assigned to Singer the portions of those future annual
lottery payments at a discount of $775,000 (i.e., $1,815,000
(total of 11 future annual payments of $165,000) less $1,040,000
(total of the amount that Singer paid to petitioners)). After
petitioners’ assignment, petitioners were entitled to receive
from CSL for each of the years 1997 through 2007 only $514,000
3For convenience, and consistent with the parties’ stipula-
tions, we shall hereinafter refer to “petitioners”, and not to
“petitioners as cotrustees of Davis Family Trust”. See discus-
sion supra note 2.
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Last modified: May 25, 2011