Background:

Recently, one of the firm's clients won $$50,000,000$ in the Power Ball drawing. The award only allows for receipt over a $20$ year period of time. A settlement company has offered the client a current lump sum payment of $$26,000,000.$ The client would like to know the tax implications of each option. One of her specific questions is whether the right to the lottery payout is a capital asset for purposes of applying the capital gain tax. Please write a memo addressing the client's questions. The memo should be laid out in the fashion discussed in class.