Womack v. Commissioner

Womack (plaintiff) won a Florida lottery prize payable in 20 annual installments of $150,000; after receiving three years of payments, he sold his right to the remaining installments for an immediate lump sum, which he reported on his tax return as a capital gain from selling a long-term asset. The Commissioner (defendant) assessed a deficiency, and the Tax Court ruled for the Commissioner.

Whether a taxpayer's right to receive lottery winnings is a capital asset for federal tax purposes.