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$300 MILLION: Massive Powerball jackpot fuels New Year's dreams

Topic closed. 87 replies. Last post 11 months ago by RedStang.

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realtorjim's avatar - images q=tbn:ANd9GcT7U3t20NgScoPlxOqLT6TR0vQeJNBV3_tTswe1XeFDTsdw3NLZ

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Posted: December 30, 2015, 10:10 pm - IP Logged

Yes, I agree. And I only want a little part of it.
So, I know, like you said, eventually someone will hit it. And to that person, I ask for just a fraction.

Yes, I know that if that happens, they may be swamped, but gee,  I've been playing for so doggone long.

Amazing, Groppo!  You must know I am currently reading your last two posts, and you also must know my Powerball ticket for tonight is a jackpot winning ticket!  A straight out gift would have a terrible backlash to me tax wise, thus I would not be taking that approach.  However, the tax laws do have certain reprieves and as such I have an intention for a LP current member sweepstakes as a way to share a little within our LP family.  This would give you an equal chance at a little part of it.  Smiley

  I'm feeling a jackpot win coming my way!

    rcbbuckeye's avatar - Lottery-043.jpg
    Texas
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    October 23, 2007
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    Posted: December 30, 2015, 10:51 pm - IP Logged

    Yes, I agree. And I only want a little part of it.
    So, I know, like you said, eventually someone will hit it. And to that person, I ask for just a fraction.

    Yes, I know that if that happens, they may be swamped, but gee,  I've been playing for so doggone long.

    Speaking of playing for so long.

    I've been cleaning out my garage and I came across a box containing old tax returns. Old as in 1985. No idea why I kept them this long. Anyway, in that year's tax return was an envelope full of Ohio lotto tickets. Printed by dot matrix printers. About 2 inches high, and maybe 10 inches long. Left to right long, not top to bottom. I forgot how they used to print them. Back then, those tickets cost $1 for 2 plays. As I recall, the jackpot was $250,000. That year, I got 5 out 6 numbers which paid $898.

    Moral of the story....

    I've been playing at least 30 years, probably longer. And the best I have done is $898.

    So when I have an urge to spend $10, $20 on MM, PB, or some other lotto game with stupid odds. I just think back over 30 years and $898.

    I'm in tonight's PB with 1 tic. Good luck to ME.

    CAN'T WIN IF YOU'RE NOT IN

    A DOLLAR AND A DREAM (OR $2)

      ArizonaDream's avatar - Lottery-009.jpg

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      Posted: December 30, 2015, 11:14 pm - IP Logged

      Calis SuperLotto maybe, but what other games give tens of millions of $$$ for 2$?

      Mega Millions is currently at 117  130 million, only $1 to play and slightly better odds.  Illinois lotto is also a buck, 18+ million right now. Those two games are where my lottery spending went this week. 

      Best wishes to those who did play PB.

       

      BTW, I'm pretty sure that income is taxed based on when it is received, not when it is earned.

        ArizonaDream's avatar - Lottery-009.jpg

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        Posted: December 31, 2015, 12:33 am - IP Logged

        Tonight's jackpot will barely be more than $300M. The lottery set the advertised jackpot based on projected sales, and last estimates put actual sales for tonight's draw at or slightly below the original projections. If the jackpot rolls it will start at $334M annuity.

        Assuming no winners, I anticipate it will take about 5-6 weeks to reach the big B.

        334 it is

         

        $205 Million Cash Value

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          Posted: December 31, 2015, 1:18 am - IP Logged

          Hmmm.  Didn't it go from a 45 million increase to a 34 million increase?  Did they over jump it just to get it to 300 million?  And really you thinking 10 more rollovers til it hits a billion?  I'd say 4 more, max.  Next one would be 380isd i'm sure.  Then what... 450 which would easily bump to 500 before the drawing.  Then katie bar the doors if it doesn't hit then.

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            NY
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            Posted: December 31, 2015, 2:30 am - IP Logged

            I disagree.  Say the pay period on your job ended on Dec. 30 and they kept you a few days or a week (or more) behind before issuing your paycheck as do many companies - the salary earned was in 2015 and would be included in your return due by April 18th*.  Now, while I'm fairly certain I'm right, I'm not positive... which is why you should consult a qualified and reputable financial expert before claiming. That said,  I'd be willing to bet a JP would be just like any other income**, counted when you "earn" it, not when you get it.

            *Yes,  April 18th, not the 15th as is usually the case.  Emancipation Day, a federal holiday, falls on the 16th next yr., which is a Saturday, but since it's on a weekend, the fed. govt. is "celebrating" (read:  shutting down fed. offices, including the IRS) the holiday on Friday.  We have three extra days this year to get our tax returns postmarked and I think in 2017 we'll still get a couple days more, due by April 17.

            ** I don't understand why jackpots are taxed as ordinary income .  (How is a win of several hundred million classified as "ordinary"?) Any large win^ + your regular income is taxed at the highest rate of 39.6%. (^over $415k+ for single filers)   It would be nice for a win to be tax-free, but barring that, it should be taxed along the lines of some flat rate (10% would be more than fair) or even like capital gains, the highest rate which is 20% for top tax bracket filers.  I'd write my representative, but....

            As noted elsewhere, constructive receipt (sometimes "economic benefit") is the relevant doctrine. It can get complicated in some situations, but for most things it's fairly simple. At least as a practical matter you have constructive receipt when you first have the ability to get the money.

            As far as a regular paycheck the easiest thing to do is just go with whatever is on your W-2 or 1099, which should reflect what you were paid during the calendar year. If you don't get your paycheck for the work you do the last week of December until the following year your employer won't have a deductible expense until the paycheck is issued, and the income from that check should be reflected in the W-2 or 1099 for the year in which the check is issued. On the off chance the check is dated for 2015 but not  given to employees until 2016, or it bounces, or anything else that's not your own fault prevents you from cashing the check in 2015 you can file your return using the income you actually collected. You'd need to include a note explaining why your claimed income and W-2/1099 don't agree, but it's doable. I suppose that could theoretically cause the IRS to adjust your employer's return, which presumably  includes that income as a deduction. That might make things at work unpleasant, so it may not be worth it for a modest sum of money. By the time you file you'll know if you got the money eventually, and how much are you likely to earn by investing the taxes for another year?

            The lottery is one of the things where constructive receipt can get complicated. I used to consider a lottery ticket to be rather like a check dated the day of the drawing. Until the drawing it's a check for $0.00, and as soon as the drawing is completed it may be a check for millions of dollars. Having read more about constructive receipt, including opinions from some legal cases, I've got a different opinion. Of course it's an opinion about the law, and only a bad attorney would offer absolutes in a legal opinion under any circumstances that aren't very straightforward. My current opinion is that, at least for the federal government, constructive receipt of a large lottery prize doesn't occur until the claim has been validated and the money has been irrevocably transferred. One of the requirements for constructive receipt is that the money is irrevocably set aside for the payee. In theory the lottery (or multiple lotteries in the case of multi-state games) could electronically transfer the money to an account dedicated to the winner just minutes after they have the drawing result, but until they validate the claim they can't do it irrevocably.

            I think we're all inclined to view the IRS as trying to collect taxes ASAP. There may be some truth to that, but they also want to maximize collections. As it happens, there's at least one case involving a dispute between a lottery winner and the IRS over when the winner had constructive receipt of his winnings. The drawing was in mid-December, and winner claimed the income was taxable that year. The IRS claimed they were taxable until the following year, when a higher tax rate was in effect. The IRS prevailed, based on two points. One was that the money hadn't been transferred irrevocably to an account for the winner's benefit. The other was that the winner wasn't a winner until the validation process was completed. Those two issues are interrelated. Until the claim was validated there was a possibility that something would result in the claim being denied, and therefore the money could be returned to other accounts, used to pay creditors, or whatever, and never be paid to the winner.

            Based on that I figure the IRS shouldn't offer a legal argument that you've won in one year if the claim isn't validated and the money irrevocably transferred in that year. Since the ticket can't possibly be validated until presented that would mean you can sit on it until the last possible day and owe taxes based on the date of validation or money transfer. Of course just because the IRS presented one argument in the past doesn't guarantee they won't offer a different legal theory when you win the lottery. A state government doesn't need to worry about a previous IRS argument, because (unless there's a similar state case I haven't found) the state can have a completely straight face while telling the court "we never thought that was how it works". Whether it's a state or the IRS I'm fairly confident that the IRS' prior argument is valid, but if the state or IRS isn't cooperative you'll need at least one judge to agree.

            "I don't understand why jackpots are taxed as ordinary income ."

            Because there's no category for extraordinary income, whether it's from being a grossly overpaid CEO, a grossly overpaid entertainer, or from something that is unique to one particular year. I totally get the idea that there are unusual situations in which somebody earns far more in one particular year than they earn in other years and see the sense of offering some kind of break to those people, but that's just not how it works. While I understand how it must be painful to send the IRS $40 million even if you're keeping $60 million I can't really muster any sympathy (for other people, that is; if it happens to me I'm sure I'll feel the pain much more), because it's still enough to live very comfortable without ever needing some other income ever again. Where I do feel sympathy for others is when somebody wins a relatively modest amount.

            In the past income averaging offered a bit of help, by treating the income as if it had been earned over 5 years. As a simplification, if you had typical income of 50k and won $1 million you'd have a total income of $1.25 million over 5 years, for an average of 250k, and the taxes would be 5 times the amount owed on 250k. You tax brackets would vary depending on the actual amount, but more of the money would be taxed at lower rates. That was repealed quite some time ago, though there's still a program for farmers and fishermen. If you win now you'll just have to deal with pocketing less than the advertised amount of the prize.

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              Posted: December 31, 2015, 2:45 am - IP Logged

              Hmmm.  Didn't it go from a 45 million increase to a 34 million increase?  Did they over jump it just to get it to 300 million?  And really you thinking 10 more rollovers til it hits a billion?  I'd say 4 more, max.  Next one would be 380isd i'm sure.  Then what... 450 which would easily bump to 500 before the drawing.  Then katie bar the doors if it doesn't hit then.

              For any given advertised prize sales vary a bit for Wednesday or Saturday drawings, so that may explain some of it. Still, I thought from the start that the increase to 300 was a bit optimistic. Maybe a calculated risk, since the psychological value of advertising 300 instead of 295 is worth more than just the real difference of $5 million.

              Accepting the $300 million figure as realistic I was guessing conservatively that the progression might be along the lines of 300, 340, 400, 500, 650, 850. That 340 figure may not be conservative enough, but it may turn out that the currently advertised value is conservative and it will reach 340 by Saturday evening. I'm not sure anybody, including MUSL, can really be sure just what happens after that.

              Counting tonight, 10 more rollovers to reach (or pass) $1 billion means an average increase of just $70 million. The new matrix and jackpot fatigue may be serious factors, but I think 70 is extremely conservative. I'm virtually positive that my guess at 650 > 850 is on the low side, and think 500 > 650 is probably also low. 2 1/2 years ago we had a jump from $350 > 590, but a year ago we got 394 > 564. That's an increase of only 72% as much despite starting from a bigger jackpot. If the rate of increase is even lower today, which seems very likely, my 400>500 might be fairly realistic, but at some point I expect people will still get crazy. I'd figure at least 3 more (after tonight), probably 4 or 5, and maybe 6. My best guess would be 5, and I'd expect that to take us well past $1 billion.

              I haven't done the math, but we may already be at the point where there's a better chance of reaching $1 billion then ever before. We'll just have to wait to see if we get the rollovers that tell us what the increases really will be.

                hearsetrax's avatar - 0118

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                Posted: December 31, 2015, 6:22 am - IP Logged

                Skeptical

                  LottoMetro's avatar - Lottery-024.jpg
                  Happyland
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                  Posted: December 31, 2015, 7:17 pm - IP Logged

                  My estimate was quite conservative but also considerate of other factors such as national weather and Mega Millions. Based on appetite in the last Powerball runs near this level I think it will take longer than many think. Don't forget that MUSL can elect to take up to 5% of sales for the reserve pool (starting end of January this is changing to a value that depends on the size of the prize).

                  It actually turns out that Wednesday had a slight last-minute boost in sales that pushed the numbers a bit over the original projections. It put the annuity at something like $301.8 million. Christmas bonuses must have been good this year Wink

                  If the chances of winning the jackpot are so slim, why play when the jackpot is so small? Your chances never change, but the potential payoff does.
                  If a crystal ball showed you the future of the rest of your life, and in that future you will never win a jackpot, would you still play?

                  2016: -48.28% (13 tickets) ||
                  P&L % = Total Win($)/Total Wager($) - 1

                    Groppo's avatar - cat anm.gif

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                    Posted: December 31, 2015, 7:54 pm - IP Logged

                    Billion dollars before February? It's getting pretty exciting!

                    Well, more than likely, if it does get there, then we have to consider how many splits there will be : ( 

                    I don't like splits (except when talking about investments, of which I currently have none).

                    I want the lotto prize to go to one person who will have half a mind, and do good things with it.

                     

                    (and please, if you are the sole winner of this Saturday's PowerBall, please, please, please, I ask for just half a million .5 million ($500,000). I will spend it on the following items:  1) A modest house 2) Ram 3500 with Cummins diesel engine 6-speed  3) the rest of the money will go for bills, fuel, etc.

                    If this happens, I depend on the kindness of the winner, and their realization that I have nothing to give, and would further ask that I not be obligated for receiving your kind gift.)

                     

                    (sounds like I should add a "pa rum papum pum", at the end of that, huh)

                      Groppo's avatar - cat anm.gif

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                      Posted: December 31, 2015, 8:22 pm - IP Logged

                      Mega Millions is currently at 117  130 million, only $1 to play and slightly better odds.  Illinois lotto is also a buck, 18+ million right now. Those two games are where my lottery spending went this week. 

                      Best wishes to those who did play PB.

                       

                      BTW, I'm pretty sure that income is taxed based on when it is received, not when it is earned.

                      I sure hope the last line in your comment is true.   I drive a short distance from the the state in which I live, to the tax-free-lotto state where I play.

                      Should I be the sole winner, I plan to move to the 0% lotto-tax state, in which I'll have gotten my new apartment, driver's license, bank account, etc.

                      Then, it's party time.

                      (and on average, the young, white women there have considerably larger kazungas)

                        Groppo's avatar - cat anm.gif

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                        Posted: December 31, 2015, 8:27 pm - IP Logged

                        Hmmm.  Didn't it go from a 45 million increase to a 34 million increase?  Did they over jump it just to get it to 300 million?  And really you thinking 10 more rollovers til it hits a billion?  I'd say 4 more, max.  Next one would be 380isd i'm sure.  Then what... 450 which would easily bump to 500 before the drawing.  Then katie bar the doors if it doesn't hit then.

                        Yeah, your figures are about as right as anyone's guess.

                        But, remember, back in 2011, when one of the lottos got up to 635 or something? 

                        It went up, like 100,000,000 (one hundred million) in one day, waiting for the next drawing.

                          RedStang's avatar - tallman zps6gf4inoc.jpg
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                          Posted: January 9, 2016, 5:10 pm - IP Logged

                          I'll bet anyone $50 bucks the jackpot reaches 900 mill.