Friday, May 26, 2006
Here is the abstract of her article as posted on SSRN:
Despite restrictions on marketability, lottery payments included in a decedent's estate must be valued by the actuarial tables and without a marketability discount. They must be valued by the actuarial tables because:
(1) Congress said so (section 7520); (2) the Supreme Court said so (Ithaca Trust); and (3) the values under the tables in the cases are not "so unrealistic and unreasonable" to necessitate, under either case law or the regulations, an exception from their application.
Section 7520 requires the sole use of the tables to value annuities and partial interests in property and no exceptions pertinent to the lottery cases are found in the statute, regulations, or prior case law. If there were no statute, regulations, or prior case law, logically one would still need to acknowledge that the value of a nonmarketable sure thing like lottery payments should not be much less than the present value of those winnings. That means their value cannot be "wildly unrealistic" or "substantially unrealistic and unreasonable" as compared to their value computed under the tables.