I.R.C. § 103 and Exclusion of Interest on Texas Lottery Prize Installments

Russell W. Hall & Associates, P.C., is sponsoring continuing education credit for a one hour presentation, including a paper and PowerPoint slide show, based on the master's thesis of Russell W. Hall, J.D., LL.M. (Tax).

The presentation is appropriate for tax attorneys, certified public accountants, and other financial professionals.  1.0 hour MCLE, CPE, and CE credit is available, as provided by the State Bar of Texas, the Texas State Board of Public Accountancy, and the Certified Financial Planner Board of Standards, Inc., respectively.

Summary:  Revenue Ruling 78-140 held that interest on state lottery prize installments is ineligible for exclusion from income under I.R.C. § 103, the statute which authorizes tax-exempt state and municipal bonds.  The thesis is that Rev. Rul. 78-140 should be limited to otherwise qualified state obligations which do not offer a cash election.  In Texas, that could mean that interest on installment payments of Lotto Texas and Mega Millions jackpots are tax-exempt, provided the prizewinner and the Texas Lottery Commission comply with the requirements for tax-exempt securities.

Topics:

a.  Federal income tax issues under I.R.C. § 103 and Rev. Rul. 78-140

 

b.  Tax-exempt federal securities issues including qualified obligations, I.R.C. § 149 (registration), reporting requirements, and disqualified obligations, and

 

c.  Application of federal tax and securities law to games under the Texas State Lottery Act

Materials: 

See below to download the paper and PowerPoint presentation

For more information or to schedule a presentation:

Russell W. Hall

Russell W. Hall & Associates, P.C.

6750 West Loop So. Ste. 920

Bellaire, Texas  77401-4117

(713) 662-3853

Fax (713) 662-3854

E-mail

Web site

WARNING:

THIS INFORMATION IS NOT INTENDED OR WRITTEN TO BE USED, AND IT CANNOT BE USED, FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON THE TAXPAYER.

YOU SHOULD SEEK ADVICE BASED ON YOUR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.