Roger Leslie Wolman and Caroline R. Wolman - Page 5

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          Memo. 2003-155; Johns v. Commissioner, T.C. Memo. 2003-140;                 
          Boehme v. Commissioner, T.C. Memo. 2003-81.  We held in each of             
          these cases that a right to future lottery installment payments             
          did not constitute a capital asset within the meaning of section            
          1221.1   Davis v. Commissioner, supra at 7; Watkins v.                      

               1  SEC. 1221. CAPITAL ASSET DEFINED.                                   
                    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 reference to the basis of such property           
                         in the hands of a taxpayer described in                      
                         subparagraph (A) or (B);                                     
                                                             (continued...)           





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