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Background
The parties submitted this case fully stipulated pursuant to
Rule 122.2 The stipulation of facts and the attached exhibits
are incorporated herein by this reference. At the time they
filed their petition, petitioners resided in Philadelphia,
Pennsylvania.
On June 12, 1991, petitioners won $9,595,326 from the
Pennsylvania Lottery. Petitioners did not have the option of
receiving the prize in a single lump-sum payment. The prize was
payable in 26 annual installments of $369,051. Petitioners
purchased the winning lottery ticket for $1.
On August 12, 1999, petitioners and Singer Asset Finance
Co., L.L.C. (Singer) entered into a “Sale Agreement for Lottery
Prize Payments of George M. Lattera and Angeline Lattera” and
“Terms Rider to Sale Agreement for Lottery Prize Payments of
George M. Lattera and Angeline Lattera” (the sale agreements),
that assigned petitioners’ rights, title, and interest in the
lottery prize to Singer. Under the terms of the sale agreements,
the remaining 17 annual payments of $369,051, payable on or about
June 12, 2000 through 2016, were sold to Singer for $3,372,342.
2 Unless otherwise indicated, all Rule references are to
the Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code in effect for the
year in issue.
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Last modified: May 25, 2011