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on whether the right to receive future annual lottery payments
constitutes a capital asset.
Section 1221 defines “capital asset” as follows:
SEC. 1221. CAPITAL ASSET DEFINED.
(a) In General.
For purposes of this subtitle, the term “capital asset”
means property held by the taxpayer (whether or not
connected with his trade or business), but does not
include-–
(1) stock in trade of the taxpayer or
other property of a kind which would properly
be included in the inventory of the taxpayer
if on hand at the close of the taxable year,
or property held by the taxpayer primarily
for sale to customers in the ordinary course
of his trade or business;
(2) property, used in his trade or
business, of a character which is subject to
the allowance for depreciation provided in
section 167, or real property used in his
trade or business;
(3) a copyright, a literary, musical, or
artistic composition, a letter or memorandum,
or similar property, held by-–
(A) a taxpayer whose personal
efforts created such property,
(B) in the case of a letter,
memorandum, or similar property, a
taxpayer for whom such property was
prepared or produced, or
(C) a taxpayer in whose hands
the basis of such property is
determined, for purposes of
determining gain from a sale or
exchange, in whole or part by
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Last modified: May 25, 2011