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POWERBALL CREATES WORLD'S FIRST BILLION-DOLLAR JACKPOT

Topic closed. 567 replies. Last post 11 months ago by AbsolutelyFun.

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Posted: January 11, 2016, 3:42 pm - IP Logged

Yup,

 I'll be taking a trip to Delaware tomorrow.

In the cold and snow?What?

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    January 10, 2016
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    Posted: January 11, 2016, 3:50 pm - IP Logged

    Can someone clear something up about taxes?  If you take the lump sum, they take out 25% then give you the check no?  What about the 39.6%? Do you owe that next year?

    If you take the annuity, if the fed interest skyrockets, do they up your checks to make up for the difference?

    Also, in the unlikely event the lottery (pb for example) goes bankrupt in 5 years, and you won this year and opted for the annuity, what happens to your future checks?

    Lastly, if more than one winner wins and one opts for annuity while the other chooses lump sum, what figure do they split?

    Let's say two twins in same state win the jackpot. One goes annuity and one goes lump sum. 

     

    They both pay the current rate in taxes on money gained in year one. We will assume they both use same tax strategies in year one to escape all the different deductions they could potentially take. 

    Twin Cash pays a ton more taxes up front.

    Twin Annuity pays less taxes upfront

    Twin Cash now only has to worry about future tax rates on the earnings they make from principle. Thus if Feds suddenly decide to jack taxes back up to 70% on all earnings over a million dollars they are good. Plus they can also alter how and where their money is invested to take advantage of tax savings.

    Twin Annuity is now stuck paying all their future payouts at that 70% tax rate (over the million dollars. Marginal rates of course) every year going forward until the tax rate changes. Plus they can't implement many tax reduction actions as they haven't received the money yet. They could end up losing most of their winnings to tax.

    Edit - of course the opposite is true too. Twin Annuity can come out better off if the Fed suddenly decide to go flat tax at 10 % in year two, but Twin Cash should potentially be able to make up the difference in investing their lumpsum  wisely.

      scarchelli's avatar - 1zwkm5v
      hinsdale, il
      United States
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      March 28, 2012
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      Posted: January 11, 2016, 3:53 pm - IP Logged

      Thank you.

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        Maryland
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        January 2, 2015
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        Posted: January 11, 2016, 4:00 pm - IP Logged

        Yup,

         I'll be taking a trip to Delaware tomorrow.

        Yea I got some extra time tonight so headed there now to get some tickets from there. 

          Groppo's avatar - cat anm.gif

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          January 7, 2015
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          Posted: January 11, 2016, 4:07 pm - IP Logged

          Why wouldn't you just take the lump sum and then put the money somewhere where you'll be getting your own annuity every year on top of the lump sum?

          Let's say you put 400 million of the 572m away and only live on the returns from that(plus the additional 172m in cash). How much would you be getting a year from returns?

          .

          I've been thinking of annuity vs. cash payment. 

          Annuity:
          more efficient spending of your doggone money

          Cash option: 
          Will pretty much prevent the rare/unlikely event of an IRS computer getting a glitch, and erroneously printing some notice for you to report your local irs office.

            haymaker's avatar - Lottery-012.jpg
            Egg Harbor twp.south Jersey shore
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            Posted: January 11, 2016, 4:08 pm - IP Logged

            In the cold and snow?What?

            A little cold here but no snow.

            Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

              haymaker's avatar - Lottery-012.jpg
              Egg Harbor twp.south Jersey shore
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              Posted: January 11, 2016, 4:13 pm - IP Logged

              Yea I got some extra time tonight so headed there now to get some tickets from there. 

              Thought you were there already.

               

              Does Delaware tax lottery wins ?

              Some say yes, but the jackpot analysis on USAmega shows no tax on lottery winnings.

              Thanks.

              Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

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                Posted: January 11, 2016, 4:15 pm - IP Logged

                Wendy Williams gave her studio audience all Powerball tickets today

                  TheMeatman2005's avatar - lightening
                  Brooklyn, NY
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                  October 29, 2015
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                  Posted: January 11, 2016, 4:16 pm - IP Logged

                  I put in $10 yesterday. I'll put $10 in for this one.

                  I went out for a walk Saturday and bought 4 - $2 tickets. One at four different locations.

                  At the last stop, I purchased a $5 scratch ticket as well. So, $13 spent in total.

                  I won $0 on the 4 PB tickets, but won $10 on the $5 scratch ticket.Big Grin

                  I am going to cash the $10 winner and buy 4 more Powerball tickets, 1 Megamillions and 1 NYS Lotto ticket. Good luck to all...especially me! Hyper

                  Total out of pocket I am going to spend for PB tickets for Wed's drawing = $0.00

                  By the way...The new jackpot for Wed is now

                  $1.4 Billion = cash value $868 Million

                  DanceHyperBananaHurray!PartySee Ya!Sad CheersUS FlagSmashWhite BounceScared

                  The Meatman

                  “The quickest way to double your money is to fold it in half and put it in your back pocket.” Will Rogers

                  Winning happens in a flash, Like A Bolt Of Lightning!  Patriot

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                    Farmington Hills
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                    September 15, 2006
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                    Posted: January 11, 2016, 4:21 pm - IP Logged

                    .

                    I've been thinking of annuity vs. cash payment. 

                    Annuity:
                    more efficient spending of your doggone money

                    Cash option: 
                    Will pretty much prevent the rare/unlikely event of an IRS computer getting a glitch, and erroneously printing some notice for you to report your local irs office.

                    Annuity: supreme trust in the government to live up to its obligations for 30 years without politicians deciding there's a "better purpose" for those funds

                    Cash: under my control

                     

                    I did hear about a couple who claimed a jackpot, one taking the cash option and the other the annuity. If it's a big enough jackpot, it might be worth considering.

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                      Wisconsin
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                      January 10, 2016
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                      Posted: January 11, 2016, 4:33 pm - IP Logged

                      Let's say two twins in same state win the jackpot. One goes annuity and one goes lump sum. 

                       

                      They both pay the current rate in taxes on money gained in year one. We will assume they both use same tax strategies in year one to escape all the different deductions they could potentially take. 

                      Twin Cash pays a ton more taxes up front.

                      Twin Annuity pays less taxes upfront

                      Twin Cash now only has to worry about future tax rates on the earnings they make from principle. Thus if Feds suddenly decide to jack taxes back up to 70% on all earnings over a million dollars they are good. Plus they can also alter how and where their money is invested to take advantage of tax savings.

                      Twin Annuity is now stuck paying all their future payouts at that 70% tax rate (over the million dollars. Marginal rates of course) every year going forward until the tax rate changes. Plus they can't implement many tax reduction actions as they haven't received the money yet. They could end up losing most of their winnings to tax.

                      Edit - of course the opposite is true too. Twin Annuity can come out better off if the Fed suddenly decide to go flat tax at 10 % in year two, but Twin Cash should potentially be able to make up the difference in investing their lumpsum  wisely.

                      Okay I recently joined after lurking, but with a now $1.4BILLION!!! jackpot I figured I'd join in on the convo. So my question, if you or anyone else knows, can a husband and wife claim both annuity and cash? So like the wife claims annuity on her portion of the ticket and the husband claims cash on his?

                      Q:"Winingbadger you just won $1million! What are you going to do?" 

                      Me:"Pay off my student loans and with the remaining $10 get a good bottle of wine or a meal from culvers" Sun Smiley

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                        Posted: January 11, 2016, 4:37 pm - IP Logged

                        Annuity: supreme trust in the government to live up to its obligations for 30 years without politicians deciding there's a "better purpose" for those funds

                        Cash: under my control

                         

                        I did hear about a couple who claimed a jackpot, one taking the cash option and the other the annuity. If it's a big enough jackpot, it might be worth considering.

                        Just saw your post after asking my question. Though that's what I think I would do. Just to be "safe". As that would mean $200mil upfront after taxes and then $10ish mill increasing every year for the next 30 years.

                        Q:"Winingbadger you just won $1million! What are you going to do?" 

                        Me:"Pay off my student loans and with the remaining $10 get a good bottle of wine or a meal from culvers" Sun Smiley

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                          Posted: January 11, 2016, 4:42 pm - IP Logged

                          Time for another cash advance or pawn somethingThud

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                            August 14, 2012
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                            Posted: January 11, 2016, 4:59 pm - IP Logged

                            Just saw your post after asking my question. Though that's what I think I would do. Just to be "safe". As that would mean $200mil upfront after taxes and then $10ish mill increasing every year for the next 30 years.

                            Just FYI your state lottery determines if you can do this NOT the powerball people.  So you would have to check with your state lottery.

                            Lotto Lucy

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                              Alabama
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                              January 9, 2016
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                              Posted: January 11, 2016, 5:05 pm - IP Logged

                              Monday Greetings To One & All ....

                              Perhaps this has been mentioned already -- the annuitized jackpot is currently $ 1.40-billion, and the cash option jackpot is $ 868 million.

                              Based on those figures, if the annuitized jackpot reaches at least $1.613-billion by the close of ticket sales on Wednesday, then the cash option jackpot would be worth at least one billion $$ -- before the taxman comes calling of course.

                              TRIVIA -- According to older editions of the Guinness Book of Records, the late billionaire J. Paul Getty once remarked "If you can count (all of) your millions, then you're not a billionaire".

                              PREDICTION (strictly unscientific) -- there will be 32 Grand Prize winners, and 149 2nd prize winners. Beyond that, I know nothing.

                              Thanx-A-Lot, Best of Luck and Please Remember to Always Play Responsibly,

                              Frank-0-Sport 16

                                 
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