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acquired.” Sec. 301.6323(h)-1(f)(3), Proced. & Admin. Regs.; see
also Estate of Frothingham v. Commissioner, 60 T.C. 211, 215
(1973)(for estate tax purposes, “adequate and full consideration
in money or money’s worth” generally means consideration of
“equivalent amount” to the property transferred for it).
Petitioner contends that the consideration element of the
treaty definition has been met here by virtue of the fact that
the California State Lottery received “adequate and full
consideration” for the payments made to petitioner from all
purchasers of tickets for the lottery he won. According to
petitioner, the terms of the treaty do not require that the
recipient of the lottery payments be the source of the
consideration; rather, it is sufficient if the payor (California
State Lottery) received adequate and full consideration from any
source-–in this case, the other purchasers of lottery tickets.
We do not believe petitioner’s theory comports with the
language of the treaty. The California State Lottery’s
“obligation” to make the payments at issue was not “in return
for” any consideration provided by the nonwinning purchasers of
lottery tickets. The consideration provided by these purchasers
was in return for, and fully expended for, a chance to win the
lottery; i.e., a wager. Cf. Goldman v. Commissioner, 46 T.C.
136, 139 (1966)(purchase price of a lottery ticket is
consideration expended for chance to win, not a contribution to
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