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Describe tax treatment of property dispositions

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Reference no: EM133001682

Problem 1: Describe tax treatment of property dispositions if a one of the firm's clients won $50,000,000 in the Power Ball drawing. The award only allows for receipt over a 20 year period of time. A settlement company has offered the client a current lump sum payment of $26,000,000. The client would like to know the tax implications of each option. One of her specific questions is whether the right to the lottery payout is a capital asset for purpose of applying the capital gain tax.

Reference no: EM133001682

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