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Income tax on the winnings

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Reference no: EM13818793

Sai Wing Mock and John Tuhi were partners in a 30 minute oil change business. One of their vendors gave them several state scratch-off lottery tickets as a gift. One of the tickets turned out to be a winning ticket worth $1 Million. State law limited the payment of the lottery proceeds to a single, individual person. Accordingly, Mock and Tuhi executed a separate ownership agreement in the ticket. The agreement provided that Mock and Tuhi owned the ticket in equal shares. Mock cashed in the ticket, and gave $500,000 to Tuhi. Who owes income tax on the winnings? Did Mock make a gift to Tuhi?

Reference no: EM13818793

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