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Martin Brian Karol's Answers

Martin Brian Karol
Corporate / Incorporation Lawyer.
Contributor Level 5

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Attorney answers:

  1. Martin Brian Karol

Lottery winnings taxed in year won OR collected?

Asked by a user in Cave Creek, AZ - over 3 years ago.

If you think of the lottery ticket like a stock certificate or other asset whose value will change over time (i.e., you buy it for $1 and after the drawing it is worth either $0 if you loose or $100+ if you win), then the tax trigger event will be the collection of the winnings in 2009. This 'realization event' would be like selling an appreciated share of stock in 2009 that you purchased in 2008.

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Attorney answers:

  1. Martin Brian Karol

Capital gains treatment as relates to house sale

Asked by a user in Racine, WI - over 3 years ago.

Under Section 121 of the Internal Revenue Code, a married couple can exclude up to $500,000 from the sale of a property which was their primary residence for at least 2 of the previous 5 years. Income from the sale of your Wisconsin home will be excluded from your joint return as long as it is made within approximately 3 years. The calculation for taxable gain (if not excluded under Sec. 121) is the sale price less the 'adjusted basis' in the property. In this case, the adjusted basis...

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