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Lisa has had luck over the years, this is her 5th time winning the lottery. In the past
she has had pools of community tickets and always shared winnings with those in the
pool without question. Lisa plans to keep playing the lottery, using pools with
different groups of friends and insists she will hit another big jackpot in her life. Her
question for you.... should she form an S Corporation and make members of the pool
shareholders? What are the tax and logistical considerations that would need to be
discussed if she were to use an S-Corporation as a passthrough for future lottery
activities?
QUESTION: What sections of the I.R.C. are applicable to the situation.
Answer & Explanation
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