Ismat M. Abeid - Page 12

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          Goldman v. Commissioner, supra.  Petitioner became entitled to              
          the stream of payments not by reason of any exchange of                     
          consideration, but by virtue of winning a wager, a separate                 
          taxable event under U.S. tax law constituting an accession to               
          wealth.  See, e.g., McClanahan v. United States, 292 F.2d 630,              
          631-632 (5th Cir. 1961); Solomon v. Commissioner, 25 T.C. 936,              
          938-939 (1956); Lutz v. Commissioner, T.C. Memo. 2002-89;                   
          Lyszkowski v. Commissioner, T.C. Memo. 1995-235, affd. without              
          published opinion 79 F.3d 1138 (3d Cir. 1996).  Thus, the                   
          payments petitioner received from the California State Lottery              
          were neither “in return for” the $1 consideration he cites, nor             
          was this consideration “adequate and full” with respect to those            
          payments.  The payments were the proceeds of a winning wager;               
          i.e., gambling winnings.                                                    
               Petitioner also relies upon Estate of Shackleford v. United            
          States, 82 AFTR 2d 98-5538, 98-2 USTC par. 60,320 (E.D. Cal.                
          1998), affd. 262 F.3d 1028 (9th Cir. 2001), to support his claim            
          that the $1 purchase price of the lottery ticket was adequate and           
          full consideration for the lottery payments.  In that case, a               
          decedent lottery winner’s estate argued that the decedent’s right           
          to California lottery payments, if deemed an annuity, should not            
          be included in the gross estate by virtue of section 2039(b).               

               9(...continued)                                                        
          chance.  See sec. 31.3402(q)-1(d), Example (10), Employment Tax             
          Regs.                                                                       





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