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taxpayer for the right to receive the future lottery payments,
and, therefore, the money received for the sale of the right
could not be seen as reflecting an increase of value above the
cost of any underlying asset.3 Id.; see also Boehme v.
Commissioner, T.C. Memo. 2003-81 (holding taxpayer’s right to
receive future annual lottery payments did not constitute a
capital asset). We reiterated this reasoning in Clopton v.
Commissioner, T.C. Memo. 2004-95, in which we held that the lump-
sum amount received in exchange for an interest in a trust
holding the right to receive future lottery payments was ordinary
income. As a result, petitioner’s arguments fail under Maginnis.
Additionally, we find the facts in the instant case
indistinguishable in substance from the facts in our opinion of
Davis v. Commissioner, 119 T.C. 1 (2002), and cases relying on
this opinion, in which a taxpayer assigned a right to future
lottery installment payments in return for a lump-sum payout at a
discounted value from a third party. Id. at 3; Lattera v.
Commissioner, T.C. Memo. 2004-216; Clopton v. Commissioner,
supra; Simpson v. Commissioner, T.C. Memo. 2003-155; Johns v.
Commissioner, T.C. Memo. 2003-140; Boehme v. Commissioner, supra.
We held in each of these cases that a right to future lottery
3 We note that petitioner’s tax return reported a zero cost
basis with regard to amount received for the assignment of the
future lottery installment payments to Stone Street.
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