Some taxpayers make novel arguments in attempts to be taxed at a favorable capital gains rate. Wolman v. Comm. is a Tenth Circuit Court of Appeals order and judgment affirming a Tax Court decision, and it shows how creative taxpayers can be.
In 1994, Roger Wolman won $1.5 million in the Colorado lottery, payable in twenty-five annual installments. He and his wife reported the first five payments as ordinary income on their federal tax returns. In 1998, Wolman sold his right to receive the remaining lottery installment payments to a financing company in exchange for two lump-sum payments, payable in 1998 and 1999. They reported this sale on their 1998 and 1999 tax returns as the sale of a capital asset resulting in a capital gain.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access