Review the following facts:

Cara Kolbert and Homer Luck live together and have pooled their funds for several months to purchase food and other household necessities and to buy an occasional state lottery ticket. Cara used part of the pooled funds to buy a lottery ticket that won $3 million. When they discovered that the lottery proceeds could be paid only to one recipient under state law. Cara and Homer executed a "separate ownership agreement". The agreement created an equal interest in the ticket for both Cara and Homer. Must Cara pay gift tax on the transfer of a one-half interest in the ticket to Homer? What is the value of the gift?

Additional Related Questions:

1. What are the IRS pronouncement(s) that deal(s) with this situation?

2. Review the IRS pronouncement(s).

3. Are you able to reach a conclusion about the research question? If so, what is your conclusion?