You Just Won the Lottery: Now to Fill the Promises

Abstract

This project requires students to research primary source material, relate the research to a client situation, and communicate a suggested solution to the client, as well as work papers. The student plays the role of a CPA who has a friend who has just won a significant lottery jackpot. The student analyzes the situation and addresses issues for his friend/client whether or not he has a legal partnership with his co-workers is required to share winnings. The student also must investigate whether or not the friend seeking advice has a partnership with family members in which he made verbal promises to. Lastly, the student is asked to consider tax and practical issues had the lottery winnings been paid and distributed through an S-Corporation. The fact pattern is derived from three actual cases that pertain to the use of an S-Corporation to receive lottery winnings, and an individual who was in charge of a lottery pool and challenged if he was required to share winnings based on the existence of a partnership.