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22 N.Y. coworkers' complicated journey to claim $1 million prize

Topic closed. 28 replies. Last post 3 years ago by Lucky4Life.

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ShowMeTheMoney$'s avatar - Lottery-050.jpg

United States
Member #140525
March 21, 2013
119 Posts
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Posted: January 24, 2014, 12:51 pm - IP Logged

I play alone. I think when I win, I will just go in the very next day so I can have that money hit my bank account in 2 weeks time. Then I would setup other accounts after that and transfer funds as need be. I don't care if people know my name since your name has to be disclosed even when claiming in trust or LLC in states that do not permit anonymous prize claim. If things get too unbearable, I would have more than enough money to change my name.

Changing your name seems very extreme to me.  I would only do that as a last resort.  Maybe you should just get an unlisted phone number and move into a guard-gated community.  That would probably get you some privacy and make winning the lottery more enjoyable.

    helpmewin's avatar - dandy
    u$a
    United States
    Member #106665
    February 22, 2011
    19908 Posts
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    Posted: January 24, 2014, 12:57 pm - IP Logged

    Congratulations to all the winnersParty

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      NY
      United States
      Member #23835
      October 16, 2005
      3475 Posts
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      Posted: January 24, 2014, 1:39 pm - IP Logged

      The reason for the States doing 10 or in my state Mass. 1 is both greed and lazy. the greed part is pay 1 check to group and he has to pay others so alot more in taxes for state ALOT MORE.The lazy is why do work when you don't have to...know any state worker that does anything extra to help regular people LOL there is an IRS form 5754 to which lottery winnings with groups is used,so its not like its something new or states have to do more than print more check the paper work is done for each person to pay his/her own taxes.If the IRS can figure this out funny how the states can't go alone with it unless states want to cheat you out of more of your money.

      The taxes are essentially the same regardless of how many checks the lottery does or doesn't write, because they're paid by each individual based on their total taxable income.

      The only difference would be based on how much is spent by the LLC on lawyers or accountants. That money will be a tax deductible expense for the LLC, but will result in taxable income for the lawyers and accountants, whose marginal tax rates may differ from the members of the LLC. That difference in marginal rates will change the taxes owed only on the amount spent on those deductible fees, and may increase or decrease the total taxes resulting from the prize. Whatever rules the lottery has on how many checks they'll write for each claim has nothing to do with the taxes.

      As for IRS form 5754, that makes it fairly easy for a group to accept and disburse the winnings without hiring professionals, but the expense of those professionals is relatively minor. Even if it cost $4400 (which is very generous), that's only a $200 (pre-tax) expense to the individual who would be doing the work themselves. After taxes it might have cost him about $150 to have somebody else deal with the hassles and make sure everything is done right.

      I'll also note that by simply taking a single check there's no need to give the lottery more than one name. That means that at least 21 of these people could have remained anonymous, as there's no reason this story should have had all 22 names. OTOH, the one person whose name will be public information may find it useful to publicize the fact that they've won 50k instead of $1 million.

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        Framingham,Ma
        United States
        Member #87369
        February 23, 2010
        50 Posts
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        Posted: January 24, 2014, 2:06 pm - IP Logged

        Is it essentially the same 1 person the one getting the check pays 25% tax on the 1 million in TX no state tax, then he has to give the other 21 their share as a gift,in mass you are allowed to give family members up to 11,000. per year but giving to any others it gets taxed different depending on the amount and  then those people have to claim it and pay taxes on that money. I believe that is the way it works any accountants out there might have a better understanding of this.So he paid the tax in first place then he and them pay taxes again.where the IRS form for group claimings each person is responsible for each amount.

          TheGameGrl's avatar - character catafly.jpg
          A long and winding road
          United States
          Member #17084
          June 10, 2005
          4532 Posts
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          Posted: January 24, 2014, 2:09 pm - IP Logged

          The taxes are essentially the same regardless of how many checks the lottery does or doesn't write, because they're paid by each individual based on their total taxable income.

          The only difference would be based on how much is spent by the LLC on lawyers or accountants. That money will be a tax deductible expense for the LLC, but will result in taxable income for the lawyers and accountants, whose marginal tax rates may differ from the members of the LLC. That difference in marginal rates will change the taxes owed only on the amount spent on those deductible fees, and may increase or decrease the total taxes resulting from the prize. Whatever rules the lottery has on how many checks they'll write for each claim has nothing to do with the taxes.

          As for IRS form 5754, that makes it fairly easy for a group to accept and disburse the winnings without hiring professionals, but the expense of those professionals is relatively minor. Even if it cost $4400 (which is very generous), that's only a $200 (pre-tax) expense to the individual who would be doing the work themselves. After taxes it might have cost him about $150 to have somebody else deal with the hassles and make sure everything is done right.

          I'll also note that by simply taking a single check there's no need to give the lottery more than one name. That means that at least 21 of these people could have remained anonymous, as there's no reason this story should have had all 22 names. OTOH, the one person whose name will be public information may find it useful to publicize the fact that they've won 50k instead of $1 million.

          Love the operative word "essentially". Ohh I so want you to do my taxes this year and essentially be off a few thousand, I'm sure my state and Federal will adore you for that :)

          Since the topic is about the winners and tip claims, the only gain I gathered is to stay away from Pool lotteries. Win on your own, lose on your own, just do it on your own.

          ~~Is it true, Is it kind,Is it necessary. ~~~

          christmas holly jolly numbers: 255,303,6911, 474,477 silver:47,gold:79.

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            United States
            Member #94616
            July 24, 2010
            4735 Posts
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            Posted: January 25, 2014, 7:30 am - IP Logged

            I think this is great news that 22 co workers walk away with about $30,000 each.

            Thumbs Up I agree, spread the wealth.  I also like the comment about if they had hit one more number the department would have been wiped out--- LOL!!!!!

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              NY
              United States
              Member #23835
              October 16, 2005
              3475 Posts
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              Posted: January 25, 2014, 11:03 am - IP Logged

              Love the operative word "essentially". Ohh I so want you to do my taxes this year and essentially be off a few thousand, I'm sure my state and Federal will adore you for that :)

              Since the topic is about the winners and tip claims, the only gain I gathered is to stay away from Pool lotteries. Win on your own, lose on your own, just do it on your own.

              I used the word "essentially" because the taxes won't be exactly the same, but they will be very close. That should be clear from the remainder of my post, but I could explain it again if you found it too confusing.

                Avatar
                NY
                United States
                Member #23835
                October 16, 2005
                3475 Posts
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                Posted: January 25, 2014, 11:19 am - IP Logged

                Is it essentially the same 1 person the one getting the check pays 25% tax on the 1 million in TX no state tax, then he has to give the other 21 their share as a gift,in mass you are allowed to give family members up to 11,000. per year but giving to any others it gets taxed different depending on the amount and  then those people have to claim it and pay taxes on that money. I believe that is the way it works any accountants out there might have a better understanding of this.So he paid the tax in first place then he and them pay taxes again.where the IRS form for group claimings each person is responsible for each amount.

                It doesn't matter who gets a check(s). All that matters is who gets taxable income.  If you get a check for $1 million and disburse $50,000 each to 19 other winners your taxable income is only $50,000 and each of the other 19 also has $50,000 in taxable income.

                Of course the withholdings are another good reason to have formed an LLC and spent a modest amount to do so. If one individual claims the prize and then disburses the money the withholdings will be credited to their tax obligation, and they will be getting a very fat tax refund because their actual obligation will be far less than the withholdings. In this case, since that one individual was only entitled to  about 5% of the prize they would not have had the funds to pay the other winners until receiving the refund. With the LLC the income passes through to all of the winners and the withholdings are distributed and credited to each winner's tax obligations.

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                  Portland, OR
                  United States
                  Member #145973
                  August 20, 2013
                  226 Posts
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                  Posted: January 25, 2014, 11:55 am - IP Logged

                  Re: name changing post, I wouldn't mind changing my name to claim the prize and avoid media and the crazies' attention.  Don't know anything about that or how long it takes but I'd try to do it.  I'll always be Johnny C. to me and my family and that's all that matters.  And if I can recoup the name later on, the sweeter.

                  Edit:  Most states require name changes be published on your city's newspaper.  The weasel media know this of course.  Scratch that.  LOL

                  "Understand... people are more complicated than the masks they wear in society... everyone is playing to win, and some people will use moral justifications to advance their side"

                                                                                                                                                                            Robert Greene

                    LottoGuyBC's avatar - Lottery-050.jpg
                    British Columbia
                    Canada
                    Member #116101
                    September 4, 2011
                    4033 Posts
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                    Posted: January 26, 2014, 8:56 am - IP Logged

                    that's why I prefer to play alone

                    "You have to be in it to win it!"

                      lucky 4moola's avatar - F2
                      New Member
                      Austin
                      United States
                      Member #151153
                      January 8, 2014
                      11 Posts
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                      Posted: January 27, 2014, 7:27 pm - IP Logged

                      CDanaT: Coincidentaly I just received today an answer from TX Lottery to my question, "is it possible for us, Texans, to make suggestions designed to benefit the Texas Lottery?" And their answer was: "You can make general suggestions to our customer service email address:  customer.service@lottery.state.tx.us"

                      So, I guess, it's up to us to change the one-check policy ..

                        rdgrnr's avatar - walt
                        Way back up in them dadgum hills, son!
                        United States
                        Member #73904
                        April 28, 2009
                        14903 Posts
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                        Posted: January 27, 2014, 8:54 pm - IP Logged

                        Love the operative word "essentially". Ohh I so want you to do my taxes this year and essentially be off a few thousand, I'm sure my state and Federal will adore you for that :)

                        Since the topic is about the winners and tip claims, the only gain I gathered is to stay away from Pool lotteries. Win on your own, lose on your own, just do it on your own.

                        I agree, GameGrl.

                        "Uh, your open heart surgery was essentially successful, ma'am."

                        Oh, you didn't agree with that?

                        Well, obviously you're confused.

                        Hey look over there! A squirrel!

                        LOL...

                        If jellyman was a lawyer, he'd be known as a shyster.

                          Avatar
                          New Member
                          bronx
                          United States
                          Member #151841
                          January 28, 2014
                          1 Posts
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                          Posted: January 28, 2014, 9:55 pm - IP Logged

                          The ten member limit for private groups in ny make no sense, because you can have up to 25 group members if you join thier mail in  or online subscription for mega and lotto..........

                            Lucky4Life's avatar - batman14

                            United States
                            Member #85037
                            January 7, 2010
                            252 Posts
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                            Posted: February 3, 2014, 12:23 pm - IP Logged

                            "They are handing me a million dollars"

                             

                            No, no they aren't.  it's only 34,000 after taxes splitting it 22 ways.  Do you know how mad I would be?? I guess I am shelfish but I could never, ever join a pool.