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3d Circuit: Sale of Lottery Winnings Produces Ordinary Income, Not Capital Gain

In Lattera v. Commissioner, No. 04-4721 (3d Cir. 2/14/06), the Third Circuit affirmed the Tax Court [T.C. Memo. 2004-216] ruling that a lottery winner who, after receiving several annual installments of a lottery prize, sells for a lump sum the right to their remaining payments must report ordinary income rather than capital gain on the sale.  (Hat Tip:  Howard Bashman.).


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