November 26, 2015

Homework Help: tax accounting

Posted by will smithe on Thursday, June 9, 2011 at 1:34am.

bruce wilson won 2 million in the state lottery. the lottery pays out the prize money in 20 annual installments of 100,000 each. After receiving three 100,000 installments, bruce sold the remaining 1.7 million of payments for 1 million. He wants to report the 1 million as long-term capital gain on his tax return, and pay tax at the 15 percent long term capital gains tax rate rather than at his 35 percent marginal tax rae for ordinary income. Bruce requests you to research the law regarding the tax treatment of the 1 million and advise him on whether the payment qualifies for the 15 percent tax rate or would be taxed as ordinary income at his 35 percent marginal tax rate.

Answer this Question

First Name:
School Subject:

Related Questions

More Related Questions