Matthew S. Levine

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Lottery Winnings as Capital Gains

114 Yale L.J. 195 (2004) Pity J. Michael Maginnis. In 1991, he had the misfortune to win $9 million in the lottery. Five years later, he sold his remaining winnings--fifteen annual payments of $450,000 each--to Woodbridge Financial Corporation for a $3.95 million lump sum. He reported this payment on his tax return as ordinary income, but he changed his mind...