Davis v. Comm'r
United States Tax Court
Ps assigned to S their right to receive a portion of each of certain future annual lottery payments in exchange for a lump-sum payment to them by S of $ 1,040,000. Held: S paid Ps a lump-sum amount for the right to receive certain future ordinary income. Held, further, Ps' right to receive certain future annual lottery payments does not constitute a capital asset within the meaning of sec. 1221, I.R.C. Held, further, the $ 1,040,000 that Ps received from S is ordinary income.
1Opinion of the Court
OPINION
Chiechi, Judge:
Respondent determined a deficiency in petitioners’ Federal income tax (tax) for 1997 in the amount of $210,166.
We must determine whether the amount that petitioners received in exchange for the assignment of their right to receive a portion of certain future annual lottery payments is ordinary income or capital gain.1 We hold that that amount is ordinary income.
Background
This case was submitted fully stipulated. The facts that have been stipulated are so found except as stated herein.
Petitioners resided in Lake Arrowhead, California, at the time they filed the petition.
On…
2Cases cited15 opinions
- Burnet v. HarmelSupreme Court of the United States · 1932
- Commissioner v. P. G. Lake, Inc.Supreme Court of the United States · 1958
- Hort v. CommissionerSupreme Court of the United States · 1941
- Commissioner v. Gillette Motor Transport, Inc.Supreme Court of the United States · 1960
- Rybak v. CommissionerUnited States Tax Court · 1988
10 more not listed; retrieve them via the Exa API.
3Cited by25 opinions
- Mendes v. Comm'rUnited States Tax Court · 2003
- United States v. J. Michael Maginnis Janet Y. MaginnisCourt of Appeals for the Ninth Circuit · 2004
- George Lattera Angeline Lattera v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 2006
- Palahnuk v. Comm'rUnited States Tax Court · 2006
- Watkins v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 2006
20 more not listed; retrieve them via the Exa API.