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$241 MILLION: Mega Millions lottery frenzy ramps up

Topic closed. 241 replies. Last post 5 years ago by faber98.

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CDanaT's avatar - tiger avatar_04_hd_pictures_169016.jpg
TX
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January 4, 2012
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Posted: March 17, 2012, 8:51 pm - IP Logged

I wonder if you can save on taxes this way.

You take the annuity option.

Part of that payment is interest.

Interest is accrued when you are in Switzerland not your state.

Searching4luck.....tell ya what, since you are still bent on the annuity issue ..take a look at all the Powerball winners and ALL the Mega Millions winners and see how many of them took the annuity versus taking the cash......wonder how many of them talked to financial advisers before accepting the jackpot ??  2/3rds, 1/2 ???  I think those folks probably took their accountants advice and TOOK THE CASH !!!!!!...but like any winner, its yours to do with what you please....Best of luck in tonight's and future drawings...

Stay Positive, Believe and good things will come your way

    KSplayer's avatar - lightening
    KS
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    December 29, 2010
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    Posted: March 17, 2012, 9:40 pm - IP Logged

      Kansas has ruined their karma by not making Toto their official state dog. What were they thinking.What?

    I seen that my daughter was so sad because all the kids in her school colored pictures and sent them to Rep. Timmer.

    DREAMS DO COME TRUE!!!!!!!!!Blue Angel

      KSplayer's avatar - lightening
      KS
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      December 29, 2010
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      Posted: March 17, 2012, 9:41 pm - IP Logged

      Wait a minute, isn't that where Dorothy was from? The Wizard of Oz couldn't pull it off back in "36", but I think your time is due now Kansas!!!

      I Agree! I bought my ticket tonight now just to wait for tuesday to get here.

      DREAMS DO COME TRUE!!!!!!!!!Blue Angel

        KSplayer's avatar - lightening
        KS
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        December 29, 2010
        108 Posts
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        Posted: March 17, 2012, 9:44 pm - IP Logged

        Not saying this or the PB jackpot is mine but when an LP blogger wins let's make the agreement that he/she will pay homage to HRH Todd and the LP Royal Family. We don't have to know who you are on here but just want to know that one of us finally HIT BIG!!!!

         

        Deal?

        I Agree!  I will make sure i say a big thank you to HRH Todd and all my LP Royal Family!

        DREAMS DO COME TRUE!!!!!!!!!Blue Angel

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          Indiana
          United States
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          December 26, 2011
          47 Posts
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          Posted: March 17, 2012, 10:05 pm - IP Logged

          Searching4luck.....tell ya what, since you are still bent on the annuity issue ..take a look at all the Powerball winners and ALL the Mega Millions winners and see how many of them took the annuity versus taking the cash......wonder how many of them talked to financial advisers before accepting the jackpot ??  2/3rds, 1/2 ???  I think those folks probably took their accountants advice and TOOK THE CASH !!!!!!...but like any winner, its yours to do with what you please....Best of luck in tonight's and future drawings...

          There are actually some very good articles looking at Yield Curves that suggest that the annuity is better - not taking into account the interest question that I posted.

           

          I presume you don't know the answer to my question and thus decided to snark at me. I can snark back and say take a look at their broke asses years later to see how well their financial advisers advised them.

           

          It is a simple tax question and you don't know the answer.

           

          So , instead of ridiculing me ponder whether  you can get out of paying taxes to the state if you take the annuity.  30 million interest at 9% tax savings  is more than some jackpots.

            Bigheadnick's avatar - badluck
            Taunton, Ma
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            February 11, 2012
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            Posted: March 17, 2012, 10:45 pm - IP Logged

            AGREED!!!!

            Would it be a bad thing if an LP member won and everyone knew who they were?

            You think that person would be hounded with inbox messages?

            Absolutely! but you know what , it wouldn't bother me a bit !

            Scratchies for the win!

            We are in a two-party dictatorship. You want change ? Vote third partyThumbs Up

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              Ga
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              December 20, 2011
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              Posted: March 18, 2012, 12:14 am - IP Logged

              This is gonna stall PB sales till it hits. Just under $118 million cash in Ga. I'll be playing MM tuesday. If you win, when  you quit Would you be a $%& to your boss cause whats he gonna do fire you?, or just leave quietly cause you don't want any attention?

                CDanaT's avatar - tiger avatar_04_hd_pictures_169016.jpg
                TX
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                January 4, 2012
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                Posted: March 18, 2012, 12:25 am - IP Logged

                This is gonna stall PB sales till it hits. Just under $118 million cash in Ga. I'll be playing MM tuesday. If you win, when  you quit Would you be a $%& to your boss cause whats he gonna do fire you?, or just leave quietly cause you don't want any attention?

                Guess that would depend on the boss.....being civil and leaving quietly would be the smart thing to do Sulk Off....you can always sit back on a beach or in the mountains someplace and smile. Yes Nod You know the coworkers would be saying,"he never said a word, I am suprised he never told me" ....send em a post card from HawaiiParty

                Stay Positive, Believe and good things will come your way

                  maximumfun's avatar - Lottery-030.jpg
                  Lavender Rocket

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                  March 16, 2012
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                  Posted: March 18, 2012, 12:32 am - IP Logged

                  There are actually some very good articles looking at Yield Curves that suggest that the annuity is better - not taking into account the interest question that I posted.

                   

                  I presume you don't know the answer to my question and thus decided to snark at me. I can snark back and say take a look at their broke asses years later to see how well their financial advisers advised them.

                   

                  It is a simple tax question and you don't know the answer.

                   

                  So , instead of ridiculing me ponder whether  you can get out of paying taxes to the state if you take the annuity.  30 million interest at 9% tax savings  is more than some jackpots.

                  ooOOoo I can try to sound intelligent!  ready?  ok!  Taxes now vs. taxes then.  It's not really a question of that, as much as a question of whether you believe that you will make better long term investment choices than the return you would receive via:  the annuity.  Example:  you are an impulsive person and believe sincerely that glass slippers are about to make a HUGE comeback... and invest ALL your money in this SURE THING.  recommendation?  take the annuity. 

                  However, should be on a more earth-bound investment strategy, and believe from either track record, or the brilliance in your 'crew' that you assembled after your win, that they can beat the 4%-ish interest rate that the annuity will make long term?  then take the lump sum and you will probably, should your after-tax interest rate be 4% - definitely do better than the annuity would.

                  As far as tax rates go?  the tax policies of the US get modified every year at the end of October (why October?  is it cooincidence that it is the same time as Halloween?  dunno) and those policies can **insert gasp of horror here** be retroactive to the January 1st date of that current year!!!  so... annuity wise you are betting on a lower tax rate over time, while lump-sum you are betting that taxes will go up or remain constant.

                  Are there other factors to take into account?  Of course!  how about present value of the dollar?  (ooOOoo i best wrap this up as I have used up all my 'smart-sounding words')

                   

                  Good luck and go win win win!

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                    Urbandale, IA
                    United States
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                    November 11, 2004
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                    Posted: March 18, 2012, 12:50 am - IP Logged

                    I wonder if you can save on taxes this way.

                    You take the annuity option.

                    Part of that payment is interest.

                    Interest is accrued when you are in Switzerland not your state.

                    When you take cash, you pay the maximum federal and state income tax rates on nearly all of the dollars (because the U.S. has a graduated tax system).  When you take the annuity, more of the money is taxed at zero and lower rates that the maximum rate.

                    But the BIG reason to consider annuity is that if you take the annuity, then the lottery can invest the money BEFORE taxes.  If you take cash, then you end up with about half the money left over to invest.   It is tough to invest $100 million and catch up to someone who has invested $200 million.  Then you pay taxes on whatever you earn.  Of course, you also risk losing it all. The lottery annuity stream is guaranteed.  The state takes the risk of loss of the investment.

                    But, there are good reasons for taking the CASH too.  It you are a careful person or have a good place to put the money - usually someplace where you live with it, like your own business - then it can be a good investment.  it is also true that taxes are at historic lows and are likely to go up.  Interest rates are at historic lows and are also likely to go up.  So, one view is that it is best to pay the taxes at the lower rates and decide not to lock in investments at the low rates.  But if you are not very good invesetments and tend spend all of your money, then the annuity option may be the best choice.

                    The other answer is correct.  So far, all U.S. district tax courts have held that the state has sufficient nexus to assess an income tax.  Moving to a tax-free state or nation makes no difference.

                      CDanaT's avatar - tiger avatar_04_hd_pictures_169016.jpg
                      TX
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                      Posted: March 18, 2012, 1:36 am - IP Logged

                      When you take cash, you pay the maximum federal and state income tax rates on nearly all of the dollars (because the U.S. has a graduated tax system).  When you take the annuity, more of the money is taxed at zero and lower rates that the maximum rate.

                      But the BIG reason to consider annuity is that if you take the annuity, then the lottery can invest the money BEFORE taxes.  If you take cash, then you end up with about half the money left over to invest.   It is tough to invest $100 million and catch up to someone who has invested $200 million.  Then you pay taxes on whatever you earn.  Of course, you also risk losing it all. The lottery annuity stream is guaranteed.  The state takes the risk of loss of the investment.

                      But, there are good reasons for taking the CASH too.  It you are a careful person or have a good place to put the money - usually someplace where you live with it, like your own business - then it can be a good investment.  it is also true that taxes are at historic lows and are likely to go up.  Interest rates are at historic lows and are also likely to go up.  So, one view is that it is best to pay the taxes at the lower rates and decide not to lock in investments at the low rates.  But if you are not very good invesetments and tend spend all of your money, then the annuity option may be the best choice.

                      The other answer is correct.  So far, all U.S. district tax courts have held that the state has sufficient nexus to assess an income tax.  Moving to a tax-free state or nation makes no difference.

                      Chuck, I got looking at the total difference on this issue.....if you took the annuity, 241 mil divided by 26 payments.. it turns out to be roughly 9.2 mill a year before taxes....take the 35% federal(current rate now, unknown in the future) and whatever your state tax is..lets say 6% for a combined total of 41% on 9.2 mil, that gives you 5.33 mil a year for 26 payments = 138.73 million which includes the lotteries interest after the next 25 years.....not too shabby, if thats how its done......
                         Lets go lump sum...171 cash times 35% federal tax(current rate now) and (guessing)6% state tax ( 171 x .41) equals 70.1 in taxes..leaving you with 100 million and change..... I relocate to a state like Florida where there is no state income tax and invest 80 million. I think I could make up the 58 million in less than 25 years including the taxes on my interest.................But, with all that cash in hand at the end of the day...I dont think I would get too stressed if I didnt.

                      Stay Positive, Believe and good things will come your way

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                        Elgin, IL
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                        Posted: March 18, 2012, 3:44 am - IP Logged

                        This is gonna stall PB sales till it hits. Just under $118 million cash in Ga. I'll be playing MM tuesday. If you win, when  you quit Would you be a $%& to your boss cause whats he gonna do fire you?, or just leave quietly cause you don't want any attention?

                        Give a two weeks notice.  I don't want them to know I won millions either. The winner could be anybody, so giving a two weeks notice is not going to make them believe it was you who won. Maybe you found a better job? Maybe the doctor said you could no longer work? Maybe it's none of their freaking business? It seems like many winners just don't how to keep their mouths shut. I think I'm going to pass out when I see all six numbers are the same.

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                          Elgin, IL
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                          July 2, 2010
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                          Posted: March 18, 2012, 5:09 am - IP Logged

                          Sad Wavey I can't buy tickets, I'm in Florida, this is SO Sad.Sad

                          Sad, not! The Powerball is always in your corner.


                            United States
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                            May 25, 2011
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                            Posted: March 18, 2012, 7:27 am - IP Logged

                            Sad, not! The Powerball is always in your corner.

                            Its true our hero the Powerball is always fighting  for you!   Boxing

                            Be glad, not sad. Powerball promises to come to your state soon! But you must believe TheRightPrice!    Yes Nod

                              dpoly1's avatar - driver
                              PA
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                              October 16, 2008
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                              Posted: March 18, 2012, 8:29 am - IP Logged

                              Always take the cash! If the Dems have their way, the tax rate for the "rich" will go up! And the resulting inflation will kill your annuity!

                              dpoly1 - Playing the lottery to save the jobs of those that build, transport, sell & maintain luxury items! -

                               

                              Eschew Poverty ........... Vote Conservative!

                                 
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