Watkins v. Commissioner
United States Court of Appeals for the Tenth Circuit
447 F.3d 1269 (2006)
On May 1, 1993, Roger L. Watkins (plaintiff) won the Colorado State Lottery. Watkins was to receive his winnings in 25 annual installments. He reported his first six installments as ordinary income on his tax returns. In 1998, Watkins assigned his remaining interest in the winnings to Stone Street Capital (Stone Street) in exchange for a lump sum of $2,614,744. Of this sum, $200,000 represented fees for consulting services related to the sale of Watkins’ winnings to Stone Street. Watkins characterized the transaction as the sale of a capital asset and reported the lump sum as capital gain. The Commissioner (defendant) ruled that the lump sum received from Stone Street was ordinary income, but that Watkins was entitled to deduct the $200,000 consulting fee as a miscellaneous itemized deduction. The Tax Court affirmed the Commissioner’s ruling.
Rule of Law
Holding and Reasoning (Seymour, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 724,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.Unlock this case briefRead our student testimonials
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.Learn about our approachRead more about Quimbee
Here's why 724,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 45,500 briefs, keyed to 983 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.