The Family (Office) Lottery Pool; Do You have a Written Sharing Agreement?


In Dickerson v. Comm., TC Memo 2012-60, The Tax Court has held that a taxpayer’s transfer of her interest in a winning lottery ticket to a corporation 49% owned by her and 51% owned by family members resulted in a taxable gift because there was no enforceable contract to share the lottery prize with her family.

Tonda Dickerson worked as a waitress in an Alabama restaurant frequented by a customer who often made gifts of Florida lottery tickets to the workers of the establishment. On Mar. 7, 1999, a customer gave Tonda a winning lottery ticket with a cash payout amount of $5 million (over $10 million if paid out over 30 years). As with many families, Tonda’s family was close-knit and generally had a sharing attitude. It had a tradition of buying lottery tickets and often talked about sharing a jackpot if a family member won “the big one.” In Tonda’s case, however, there was no written sharing agreement to share lottery winnings and she had no documentation to support its existence or terms...

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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