Business Law

Ask a Business Lawyer. Get Business Law Questions Answered ASAP.

Ask a Lawyer,
Get an Answer ASAP!

Business Law

If an individual wins the lottery for $5 million and agrees

Customer Question
to receive a lump-sum payment...
If an individual wins the lottery for $5 million and agrees to receive a lump-sum payment of $4 million rather than the annual annuity installments, what is the tax treatment for the loss? Do lottery winnings have a basis? If so, how would you calculate such? Would the lottery annuity have a basis? If so, how would you calculate such? Please provide the IRC or a law suit where this is explained.
Submitted: 5 years ago.Category: Business Law
Show More
Show Less
Ask Your Own Business Law Question
Answered in 5 minutes by:
9/4/2012
Business Lawyer: Richard, Attorney replied 5 years ago
Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 55,806
Experience: 32 years of experience practicing law and a businessman.
Verified

Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

There is no loss. The winnings are treated as gambling winnings and fully taxable as ordinary income in the year received. See IRS Bulletin 419 at http://www.irs.gov/taxtopics/tc419.html

The $4,000,000 in cash now rather than $5,000,000 over time is simply based on the time value of money...i.e., the net present value of $5,000,000 received over a period of years is equal to $4,000,000 today. It has nothing to do with taxation of the money you receive. There is no basis; the winnings are simply treated as ordinary income when received.



I hope this
has given you information that has been helpful to you. If the information
seems more general than
specific, please be aware that we are only allowed to
provide information and not specific advice.
If you have a follow-up question, please remember that
there might be a delay between your follow up questions and my answers because
I may be helping others or taking a break.



If you do have any additional questions about my answer
please simply ask a follow up question without rating so I can provide
you with a fully satisfactory answer.
Please be aware that any rating of 1 or 2 is
reflected as a negative rating, reflects negatively on my performance, and I
receive no credit for my answers.





Thanks for allowing me to be of service to you. Please be
aware that the information provided here is not legal advice. Rather it is
simply general information. All states have intricacies in their laws and any
information given is simply information only and specifically is not


intended to be, nor does it constitute, legal
advice. This communication does not establish an attorney-client relationship
with you. I hope this answer has been helpful to you.





Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 55,806
Experience: 32 years of experience practicing law and a businessman.
Verified
Richard and 87 other Business Law Specialists are ready to help you
Ask your own question now
Ask Richard Your Own Question
Richard
Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 55,806
55,806 Satisfied Customers
Experience: 32 years of experience practicing law and a businessman.

Richard is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!

Gary B.Edmond, OK

My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, KS

PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.

Three H.Houston, TX

Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!

ElaineAtlanta, GA

It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Infolawyer

Infolawyer

Attorney

1,793 satisfied customers

Experienced lawyer

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

1,611 satisfied customers

Run my own successful business/contract law practice.

MShore Law

MShore Law

Attorney

1,233 satisfied customers

Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements

RGMacEsq

RGMacEsq

Attorney

742 satisfied customers

Licensed Texas General Practice Attorney

Barrister

Barrister

Attorney

640 satisfied customers

17 years practicing attorney, JD, BA, MBA

Ely

Ely

Attorney

564 satisfied customers

Counselor at Law.

J.Hazelbaker

J.Hazelbaker

Attorney

393 satisfied customers

Experienced and trained in the area of business law.

< Previous | Next >

Related Business Law Questions
I know in some states you do not need to send into the State
I know in some states you do not need to send into the State the Operation Agreement of a LLC. However the Operation Agreement spells out all the owner,members rights. If I am going into business with… read more
Law Pro
Law Pro
Doctoral Degree
19,000 satisfied customers
In a modeling agency in Ohio can a model be exclusively
In a modeling agency in Ohio can a model be exclusively restricted to one agency while working with them & have a non compete if voluntarily leaving… read more
Legal Eagle
Legal Eagle
Attorney
Doctoral Degree
5,959 satisfied customers
My brother and I inherited an Oklahoma corporation whose
My brother and I inherited an Oklahoma corporation whose only asset is a 500 crypt mausoleum with approximately 200 crypts still available for purchase; however, both of us live out-of-state and neith… read more
Infolawyer
Infolawyer
Attorney
Doctoral Degree
1,793 satisfied customers
A website / platform is allowing a company in Europe to use
A website / platform is allowing a company in Europe to use our trademark and, since their platform is heavily used by people in the United States, we are concerned that our customers will get confuse… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
I hired a moving company to move two dental cabinets from a
I hired a moving company to move two dental cabinets from a dental ware house in Florida to my dental practice in California. The moving company picked up and moved the cabinets. They have kept my cab… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
If an LLC (A LLC) in Utah has as the only member as another
If an LLC (A LLC) in Utah has as the only member as another LLC (B LLC). If B LLC failed to renew and has an expired registration as 5/30/2017. Is A LLC not defunct under Utah Code 48-3a-701 (3), beca… read more
Legal Eagle
Legal Eagle
Attorney
Doctoral Degree
5,959 satisfied customers
I want to quash a subpoena. Do I need a lawyer to do so? An
I want to quash a subpoena. Do I need a lawyer to do so?An email account (Google mail, gmail) got a notice that its records were subpoenaed. There is something in the notice about quashing it. Is this… read more
WiseOwl58
WiseOwl58
JD Honors Graduate
3,514 satisfied customers
As an independent adjuster (Florida) I would like to open my
As an independent adjuster (Florida) I would like to open my own company as claim office, soliciting business with insurance companies, I'm IA adjuster 502 licensed, is there something else that I wou… read more
Richard - Bizlaw
Richard - Bizlaw
Juris Doctor
3,685 satisfied customers
Can the Legislature of a sovereign US state delegate the
Can the Legislature of a sovereign US state delegate the powers its State Constitution provides to its elected representatives to make laws, to any other body but itself, anywhere? I think not. I thin… read more
Ray
Ray
Lawyer
Doctoral Degree
30,244 satisfied customers
I own a company in Florida. The company is a Florida
I own a company in Florida. The company is a Florida Corporation, and was incorporated in Florida. Our corporation specializes in business consulting. The main purpose of our corporation is business c… read more
WiseOwl58
WiseOwl58
JD Honors Graduate
3,514 satisfied customers
I am in a Partnership LLC in PA and my business partner has
I am in a Partnership LLC in PA and my business partner has never paid me her share of the initial purchase of inventory as I paid for it on my personal credit card. Since she has never paid if it her… read more
LegalGems
LegalGems
Juris Doctorate
10,196 satisfied customers
I am part of a 501c3 registered non-profit organization, the
I am part of a 501c3 registered non-profit organization, the Ministry of Servanthood, serving Christian community in Oregon area. Currently it pays part of the utility of my residence. Can it cover my… read more
Infolawyer
Infolawyer
Attorney
Doctoral Degree
1,793 satisfied customers
How to fill out a "Stock Transfer Ledger" for a C Corporation
How do you fill out a "Stock Transfer Ledger" for a C Corporation? I have the "Original Issue" filled in but not sure how to record transfers. The original issue was 100 shares to one person. The 1st … read more
mclemorelawyer
mclemorelawyer
Doctoral Degree
4 satisfied customers
We originally signed an NDA with a potential partner. We
We originally signed an NDA with a potential partner. We have since separate that relationship and we have been asked not to use their documents language and to return said documents. Can you recommen… read more
Infolawyer
Infolawyer
Attorney
Doctoral Degree
1,793 satisfied customers
We signed an NDA with company #1. Company #1 put us in
We signed an NDA with company #1. Company #1 put us in contact with Company #2 and company #3. Company #2/3 gave us several documents to start a project. We have since decided to part ways with Compan… read more
Legal Expert Justin
Legal Expert Justin
Law Degree
200 satisfied customers
I received a certified irs letter this morning but am at
I received a certified irs letter this morning but am at work so I'm worried sick I sent 11,000 on 10-15 return for 2016. I'm in CNC two years. I received about a month ago a tax bill for each tax yea… read more
DrakeLAW
DrakeLAW
Juris Doctorate
842 satisfied customers
I have a hand written agreement, signed but not dated, which
I have a hand written agreement, signed but not dated, which states "We agree that we will make an agreement in which I (party A) will convey half interest in my property located ------(address) to (p… read more
lwpat
lwpat
Doctoral Degree
256 satisfied customers
I'm trying to understand the best legal entity to form. Here
I'm trying to understand the best legal entity to form. Here is the scenario. There are 4 partners (not all equal equity %). All 4 of us each own our own corporations or LLCs. Our corporations simply … read more
DrakeLAW
DrakeLAW
Juris Doctorate
842 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x