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out that he had the opportunity to sell his future winnings, but
he decided not to do so. He contends that he constructively
received payment of all of his lottery winnings in 1989 because
he had an unqualified vested right to sell his future lottery
payments in 1989. We disagree for reasons stated next.
1. Whether Petitioner Constructively Received All of His
Lottery Winnings in 1989
A cash method taxpayer generally recognizes an item of gross
income when it is actually or constructively received. Secs.
1.446-1(c)(1)(i), 1.451-2(a), Income Tax Regs. A cash method
taxpayer constructively receives funds if the taxpayer has an
unqualified, vested right to receive immediate payment. Childs
v. Commissioner, 103 T.C. 634, 654 (1994), affd. without
published opinion 89 F.3d 856 (11th Cir. 1996); Martin v.
Commissioner, 96 T.C. 814, 823 (1991); Jerome Castree Interiors,
Inc. v. Commissioner, 64 T.C. 564, 568 (1975), affd. without
published opinion 539 F.2d 714 (7th Cir. 1976).
The NYSL did not offer to pay petitioner all of his lottery
winnings in 1989. Thus, petitioner did not constructively
receive all of his NYSL lottery winnings from the NYSL in 1989.
2. Whether Petitioner Constructively Received Winnings
Because He Could Have Sold the Right To Receive Future
Lottery Payments in 1989
Petitioner contends that he constructively received all of
his lottery winnings in 1989 because he could have sold the right
to receive his future lottery payments at a 50-percent discount
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