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$325 MILLION: Powerball lottery jackpot goes through the roof

Topic closed. 161 replies. Last post 4 years ago by LottoBoner.

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golfer1960's avatar - Lottery-003.jpg
Eatontown, NJ
United States
Member #119670
November 29, 2011
740 Posts
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Posted: November 23, 2012, 10:27 pm - IP Logged

By how much do you increase your chances of winning the jackpot by purchasing, say, 100, 160 or 200 tickets over just one?

Hey Hulk, I don't think it would help all that much to play $200 but it can't hurt either. The challenge is that there are 175,711,536 different numerical combinations of numbers in Powerball. You'd need alot of money to play enough combinations to make a dent in turning the odds in your favor.

Play whatever you feel comfortable playing (losing) and have some fun dreaming. The truth is that many people have hit the jackpot by just playing a few bucks.

good luck

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    Elgin, IL
    United States
    Member #93542
    July 2, 2010
    318 Posts
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    Posted: November 23, 2012, 10:55 pm - IP Logged

    By how much do you increase your chances of winning the jackpot by purchasing, say, 100, 160 or 200 tickets over just one?

    That's a waste of money. If someone has or wants to spend that much on tickets, he/she can do that, but you're still not guaranteed to win anything.

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      Ga
      United States
      Member #120454
      December 20, 2011
      141 Posts
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      Posted: November 23, 2012, 11:32 pm - IP Logged

      That's a waste of money. If someone has or wants to spend that much on tickets, he/she can do that, but you're still not guaranteed to win anything.

      Yeah I did that in March when the jackpot was  half a billion. I realized it's not worth it, set a reasonable limit and stick to it.

        golfer1960's avatar - Lottery-003.jpg
        Eatontown, NJ
        United States
        Member #119670
        November 29, 2011
        740 Posts
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        Posted: November 24, 2012, 1:55 am - IP Logged

        Just $325M and a little bit of golf. That's all I want!

        hot golf

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          NY
          United States
          Member #23835
          October 16, 2005
          3475 Posts
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          Posted: November 24, 2012, 2:12 am - IP Logged

          If there is a winner within the next few drawings, what are the chances that the winner's legal team will be able to get an appropriate trust or LLC ready so the winner can claim the jackpot under this year's taxes?  I've always assumed it would take a good two months.  The difference in taxes between this year and next could be huge, depending upon what they do in Washington D.C. within the next month.  Some of the things they've been discussing, like eliminating the charitable deduction or limiting all deductions to $50,000 could result in a difference of millions or even tens of millions of dollars in income and gift taxes in some cases.  Not that there wouldn't still be enough left to live very well indeed . . .

          The IRS rules are that income is earned when you get constructive possession. You've got constructive possession of the ticket as soon as the clerk hands it to you, and you've probably got constructive possession of any winnings as soon as the numbers are drawn.

          I don't know of any challenges yet, but there's a fair amount of thought that when the state allows you 60 days to decide between cash and annuity you can't have constructive possession until you've been able to use that time to make a careful decision, so if a winner of this jackpot wants to take their time and then claim it as January 2013 income they might be able to do so. As a practical matter the IRS isn't going to argue the matter if the resultant tax is higher. If the tax is the same the IRS collects 25% right away as withholdings, anyway. Waiting an extra year for the remaining 10% isn't really meaningful when the tax rates remain the same, so they may have simply chosen not to enforce the letter of the law if some winners have waited from late in the year and claimed the winnings as income for the following year. If the tax rate went down and enforcing the rule meant collecting an extra few million, I expect they'd try to enforce the law and we might see a court ruling.

          OTOH, that same rule means that somebody who wins this year is almost certainly entitled to claim the winnings as 2012 income no matter how long they wait before actually claiming the prize. If your employer writes your paycheck today you're free to wait  before cashing it, but the income is earned when they write the check. The only exception I can see would be a jackpot that's won between 12/15 or thereabouts and 12/31. Assuming the state never actually pays a prize in less than 2 weeks there's a reasonable argument that you don't get constructive possession until 2 weeks after the drawing. OTOH, you're entitled to the winnings as soon as the drawing makes you a winner, and there's also a very reasonable argument that the stae's inability to pay promptly doesn't change the date of your constructive possession. I'll note that anyone claiming the prize as 2012 income is obligated to pay the full tax by 4/15/2013, and they may have to make an estimated paymewnt by 1/15/2013. If they haven't collected the money by then and can't make the payment they may be looking at a significant interest payment, and perhaps a penalty as well.

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            NY
            United States
            Member #23835
            October 16, 2005
            3475 Posts
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            Posted: November 24, 2012, 2:30 am - IP Logged

            You bring up a valid concern. What most people don't realize is that lottery winnings are treated like earned income and not investment/capital gains. Our Government WILL be limiting deductions as well as raising taxes on the wealthy starting next year and lord knows where the top rate will be in 10 or 20 years.

            Just today alone on a variety of news stations I heard many view points of how someone would spend the $325 million jackpot. These clueless news anchors are insinuating that the winner will get a lump payout of the advertised jackpot amount without mentioning anything about it being an annuity or a little known evil deduction called taxes.

            Back in the early 1980's our top Federal tax rate was 70%. Back up a little more to the early 1960's and it was 91%. As a wake up call I will use the rate from the early 1960's just to give you a perspective of what you would be taking home after both Federal and state taxes are witheld. I will not use NJ, NY  or any of the other states with a high tax rate as you would most likely owe the government money if you were the lucky winner.

            I will factor in a state tax rate of 7% which is about the average rate among most of the states.

            Once again I will be using the top Federal rate from 1963. Most of us would opt for the lump sum cash if we were fortunate enough to win so that amount is $212.8 million. Federal tax at 91% would be $193,648,000 and 7% state tax is $14,896,000 making your net payout $4,256,000.

            Wouldn't this be a lovely world if you were the sole winner of a $325 million lottery and took home a little over $4 million Smile

            Being less paranoid than some I doubt we'd see a scenario like you suggest. The top tax rate from the late 40's until 1964 didn't kick in until taxable income was over $400,000. Just before WW2, when the top rate was as high as 81% it only applied to taxable income of over $5 million. Until fairly recently those wih unusually high income in one year were also able to reduce their effective rate through income averaging.

            While I wouldn't be completely surprised if we see a top rate well above 50% somewhere in the future I would be extremely surprised if the taxable income  at which it kicks in isn't vastly higher than what it is today. As a practical matter I expect we'd also see changes in state rules on the taxation of lottery winnings, since the states would want to protect sales. At the federal level I expect we'd see senators and congressmen protecting their state's lottery income by changing the federal taxation of lottery winnings. At the very least I'd expect to see a return of income averaging to reduce the effective rate. There's a fair chance we'd see the complete exemption that so many players have been hoping for.

            It's really pretty simple. We see the difference in sales between an advertised jackpot of $10 to $50 million and an advertised jackpot of $250 to $500 million. If the actual prizes become a net of only 10% far more people will  know the real value of the prize they're buying a chance for, and all of our state representatives in congress are going to have to decide between killing that enormous cash cow or collecting a fraction of it in federal taxes. It seems like a no brainer to me. Then again, it is congress we're dealing with.

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              Elgin, IL
              United States
              Member #93542
              July 2, 2010
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              Posted: November 24, 2012, 3:26 am - IP Logged

              Yeah I did that in March when the jackpot was  half a billion. I realized it's not worth it, set a reasonable limit and stick to it.

              When others win because of that, people just believe if they do the same thing, they will win. No, you won't.  One ticket or five tickets. It's doesn't matter. If it's meant to be it's meant to be. I'm buying only two tickets today and I can only hope it's meant to be.

                Uff Da!'s avatar - InCelebration 001.jpg
                Washington State
                United States
                Member #33973
                February 26, 2006
                347 Posts
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                Posted: November 24, 2012, 6:09 am - IP Logged

                The IRS rules are that income is earned when you get constructive possession. You've got constructive possession of the ticket as soon as the clerk hands it to you, and you've probably got constructive possession of any winnings as soon as the numbers are drawn.

                I don't know of any challenges yet, but there's a fair amount of thought that when the state allows you 60 days to decide between cash and annuity you can't have constructive possession until you've been able to use that time to make a careful decision, so if a winner of this jackpot wants to take their time and then claim it as January 2013 income they might be able to do so. As a practical matter the IRS isn't going to argue the matter if the resultant tax is higher. If the tax is the same the IRS collects 25% right away as withholdings, anyway. Waiting an extra year for the remaining 10% isn't really meaningful when the tax rates remain the same, so they may have simply chosen not to enforce the letter of the law if some winners have waited from late in the year and claimed the winnings as income for the following year. If the tax rate went down and enforcing the rule meant collecting an extra few million, I expect they'd try to enforce the law and we might see a court ruling.

                OTOH, that same rule means that somebody who wins this year is almost certainly entitled to claim the winnings as 2012 income no matter how long they wait before actually claiming the prize. If your employer writes your paycheck today you're free to wait  before cashing it, but the income is earned when they write the check. The only exception I can see would be a jackpot that's won between 12/15 or thereabouts and 12/31. Assuming the state never actually pays a prize in less than 2 weeks there's a reasonable argument that you don't get constructive possession until 2 weeks after the drawing. OTOH, you're entitled to the winnings as soon as the drawing makes you a winner, and there's also a very reasonable argument that the stae's inability to pay promptly doesn't change the date of your constructive possession. I'll note that anyone claiming the prize as 2012 income is obligated to pay the full tax by 4/15/2013, and they may have to make an estimated paymewnt by 1/15/2013. If they haven't collected the money by then and can't make the payment they may be looking at a significant interest payment, and perhaps a penalty as well.

                One might be entitled to claim the winnings as 2012 income even though it took into 2013 for the legal team to get the trust or LLC together, the claim to be filed with the state and the state to pay out.  But the possible tax deductions are in the document, and if one didn't yet have the money to fund a charitable trust by the end of the year, for example, I question whether the money one put in that trust could be a 2012 deduction.  With a single winner of a jackpot this large, the money a winner might donate could be huge.  I believe I've seen a few previous owners put 30% of the jackpot in a charitable trust.  Whether or not one could deduct sixty-some million would be no small matter.

                  Original Bey's avatar - Lottery-022.jpg

                  Bahamas
                  Member #133462
                  September 30, 2012
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                  Posted: November 24, 2012, 9:13 am - IP Logged

                  Do not spend heavy in Walmart and do not play heavy on the powerball. Voodoo Dancers just landed in Orlando. This is going to ROLLOVER. The costumes they're wearing alone is enough to scare off any combinations in play from coming up!

                   

                  Party

                  See what I mean - lol!

                  "Everything works  ONCE!"


                    United States
                    Member #116268
                    September 7, 2011
                    20244 Posts
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                    Posted: November 24, 2012, 9:17 am - IP Logged

                    Do not spend heavy in Walmart and do not play heavy on the powerball. Voodoo Dancers just landed in Orlando. This is going to ROLLOVER. The costumes they're wearing alone is enough to scare off any combinations in play from coming up!

                     

                    Party

                    See what I mean - lol!

                    I Agree! That dance has reached a fever pitch and no winners will emerge tonight.......

                      Nikkicute's avatar - nnjx1k
                      Wisconsin
                      United States
                      Member #123290
                      February 17, 2012
                      3052 Posts
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                      Posted: November 24, 2012, 9:19 am - IP Logged

                      Do not spend heavy in Walmart and do not play heavy on the powerball. Voodoo Dancers just landed in Orlando. This is going to ROLLOVER. The costumes they're wearing alone is enough to scare off any combinations in play from coming up!

                       

                      Party

                      See what I mean - lol!

                      What in the world???Green laugh


                        United States
                        Member #116268
                        September 7, 2011
                        20244 Posts
                        Offline
                        Posted: November 24, 2012, 9:25 am - IP Logged

                        What in the world???Green laugh

                        Green laughIts all true, I'm an eye witness.....

                          BuyLow's avatar - palm tree.jpg
                          Florida
                          United States
                          Member #61435
                          May 22, 2008
                          908 Posts
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                          Posted: November 24, 2012, 9:29 am - IP Logged

                          Do not spend heavy in Walmart and do not play heavy on the powerball. Voodoo Dancers just landed in Orlando. This is going to ROLLOVER. The costumes they're wearing alone is enough to scare off any combinations in play from coming up!

                           

                          Party

                          See what I mean - lol!

                          Aren't the drawings now conducted in Tallahassee??

                            Original Bey's avatar - Lottery-022.jpg

                            Bahamas
                            Member #133462
                            September 30, 2012
                            5946 Posts
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                            Posted: November 24, 2012, 9:33 am - IP Logged

                            Aren't the drawings now conducted in Tallahassee??

                            Have you ever been to Tallahassee? They have to perform where they wouldn't be so conspicuous. The dark spirits only require they perform in the state where the drawings are held.

                            "Everything works  ONCE!"

                              BuyLow's avatar - palm tree.jpg
                              Florida
                              United States
                              Member #61435
                              May 22, 2008
                              908 Posts
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                              Posted: November 24, 2012, 9:35 am - IP Logged

                              Have you ever been to Tallahassee? They have to perform where they wouldn't be so conspicuous. The dark spirits only require they perform in the state where the drawings are held.

                              I have LONG AGO.....ok......will take your word for it

                                 
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