- 6 - business for services rendered or from the sale of property described in paragraph (1); (5) a publication of the United States Government (including the Congressional Record) which is received from the United States Government or any agency thereof, other than by purchase at the price at which it is offered for sale to the public, and which is held by-– (A) a taxpayer who so received such publication, or (B) a taxpayer in whose hands the basis of such publication is determined, for purposes of determining gain from a sale or exchange, in whole or in part by reference to the basis of such publication in the hands of a taxpayer described in subparagraph (A). Petitioners argue that (1) the sale of a lottery award is the sale of a capital asset, (2) a lottery ticket falls within the definition of a capital asset, (3) assets similar to lottery tickets are classified as capital assets, and (4) recent court decisions regarding the sale of lottery proceeds are incorrect.5 5Although petitioners’ primary argument is that the right to receive future annual lottery payments is a capital asset, it appears that they are also arguing that the winning lottery ticket is a capital asset and that somehow the lump-sum payment received from Singer is therefore capital gain. Petitioners did not assign the lottery ticket to Singer; rather, they relinquished the lottery ticket to the State of California in order to claim the lottery prize and secure the right to the 20 annual installments of $787,000. The right to a portion of some of the annual lottery payments, not the actual lottery ticket, was subsequently assigned to Singer in exchange for the lump-sum payment of $4,485,000. It is this right to future lottery payments that is the focus of our inquiry, not the actual lottery ticket. See Johns v. Commissioner, T.C. Memo. 2003-140.Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011