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Valuation of Lottery Payments
Decedent won a state lottery that was to be paid in 20 installments, 18 of which remained payable to his estate at the time of his death. Although Decedent's estate tax return reported the remaining payments as an unsecured
debt, the Tax Court found that the installment payments had the characteristics of an annuity, i.e., the right to receive a fixed, periodic payment for a defined period. The payments were therefore valued as an annuity under §7520 using actuarial tables prescribed by that section. No marketability discount was justified because the payments were not subject to external market forces
Source: Estate of Gribauskas v. Comm'r, 116 T.C. No. 12 (March, 2001); (cf Shackleford Estate, D.C. Cal., 99-2)
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