@besatt01 agreeing with @Hal_Al as to the tax treatment of the sale of a gambling win and disposition thereof, pending I would like to make a few small points -- (a) these are two separate transactions --- for the investment cost of the lottery ticket(s) you gained an asset with an FMV ( not value as declared in the promotional literature ) of $XXXX --- thus you pay taxes on this income; (b) when you dispose of the asset to a non-relative ( i.e. an arms length transaction, assumed to be at FMV ) for $YYYY, your cost basis for purposes of gain/loss computation is $XXXX plus cost of any improvements LESS any allowable depreciation.; (c) you are taxed on any gain at your marginal rate or capital gains rate while losses are generally not recognized unless the asset was used for income generation. This is substantially the same as @Hal_Al reply except I am drawing attention to FMV at acquisition ( not advertised "value) and FMV at disposition.
