Record Jackpot Claimed, question!

Reply #15

Chewie — Thu, 10 Nov 2005 16:23:54 GMT

I think 50 people could read that and come up with atleast two ways to interpret it. That is why God created lawyers. For when normal people get tired of fighting, they can pay another group to do it for them.

Reply #14

Editgap — Thu, 10 Nov 2005 16:07:19 GMT

I guess this is the main point from your post chewie. As discussed above, if the lottery ticket is assigned, in whole or in part, after it is a winning ticket, the assignment will not be effective for the purpose of shifting any of the income tax liability. The purported assignor will be responsible for the entire income tax liability associated with the winnings. They winners will pay all the taxes as their income tax.

Reply #13

Chewie — Thu, 10 Nov 2005 14:53:18 GMT

Some info on assignment:http://www.williamsmullen.com/news/articles_detail/019.htmAssignment of Lottery ProceedsAn individual who wins a major lottery prize often is presented with more wealth and income than he or she has theretofore experienced. The lottery winner may be eager to share the wealth (and the income tax burden) with other family members or friends. Consequently, the winner may consider assigning some or all of the proceeds to one or more such persons. Whether an assignment of all

Reply #12

Chewie — Thu, 10 Nov 2005 14:41:18 GMT

That would be valuable information to have.

Reply #11

MrBobb — Thu, 10 Nov 2005 14:34:24 GMT

That's correct, however it's important to note that in addition to forming the club, the club must obtain a Federal Employer Identification Number (FEIN) from the IRS. I think you implied that in your post, but just to make sure there is no confusion, the club must apply to the IRS for a FEIN.I spoke to a person in the Tax Law division of the IRS a couple of months ago, and they told me that if the club is actually a lottery pool that is playing long-term, then forming the club involved crea... [ More ]

Reply #10

Chewie — Thu, 10 Nov 2005 14:22:32 GMT

Actually, there are severe limitattions of actual money tranfer within a family. Spouses are generally aceptable. Children are not and parents are not. Its that death tax thing. Its why Trust Funds were created, otherwise the rich could just pass checks around all day. Also, there is that pesky little phrase, intent to commit fraud. Some one transfers everything to the child, or spouse, the day before they die of cancer, bet your booty there is going to be a long, long, court case.

Reply #9

Chewie — Thu, 10 Nov 2005 14:17:16 GMT

Lottery Pools are an accepted way of gambling; otherwise they would not be popular. How long do you think it would take for a denial of a Lottery Pool to make the papers and television? Ever heard of a denial? N-O-P-E ! Lottery Pools are like a blood tranfusion to the lottery.There is no laws against pre-planning, only on post-planning. If there is a standing agreement, that can be sworn to, or documented some way (emails are good), you will have little or no trouble. There are several cases

Reply #8

RJOh — Thu, 10 Nov 2005 05:58:46 GMT

If one person claimed it all and gave parts of his winnings to other family members, it would be considered a gift and gifts of certain amounts are taxed again. Also if that person died, all the money would be part of his estate and would be subject to taxes again before being transferred to other family members. It just make sense if all the family contributed to purchasing the tickets, everyone gets a share from the get go same as any other lottery pool.

Reply #7

NoCompLotto! — Thu, 10 Nov 2005 05:16:51 GMT

Federal Tax Law states that if a group of winners want to claim a prize, they must form a club and claim it in the club's name when they go to claim the prize (it does not need to be before you buy the tickets). This way, every member of the club gets an equal share and is responsible for an equal amount of taxes on that prize (notwithstanding any other income the members have, which will add to their individual liability). Otherwise, it is one person claiming it and that one person is responsib... [ More ]

Reply #6

Stars — Thu, 10 Nov 2005 04:35:44 GMT

That is why before you do anything you get good legal AND tax advisors.My understanding (every state COULD be different, I don't know) is if you want to split up the prize like they did, you must have a prearranged agreement before you buy the lottery tickets. Which is not likely (my opinion.) I know that when I win a big prize, I plan to give my siblings and parents a chunck each (I say now around 5 percent each), again, I don't think it is 100 % legal unless you have prearanged it. Stars... [ More ]

Reply #5

rlevins — Thu, 10 Nov 2005 03:14:21 GMT

As far as Income Tax is concerned the affect of splitting would be negiligible since the winnings are very large. But they avoided gift tax if they had split in 2 or 4 and then distributed some percentage to other 5 or 7. This gift tax would have been large and would have been in addition to income tax .

Reply #4

acronym007 — Thu, 10 Nov 2005 03:02:58 GMT

What I mean to say is this, if they would have been able to keep more money by claiming it as one party don't you think they would have done so? I do. Cheers,

Reply #3

bellyache — Thu, 10 Nov 2005 02:56:03 GMT

Well I think they divided it up because the family all bought tickets together. I don't think it had anything to do with tax purposes. It was meant to be split among everyone who put some money in the jackpot. That is, if I am understanding you right.

Reply #2

Bradly_60 — Thu, 10 Nov 2005 02:56:00 GMT

No, the tax is still the same for the entire amount, they just get to split up the total amount between themselves. There might be a very small tax benefit from spliting the amount but not a big one at all.Brad

Reply #1

acronym007 — Thu, 10 Nov 2005 02:47:33 GMT

I don't know for sure but I believe it would be. After the time they spent speaking to professionals and waiting to collect; I would assume by their response that this solution keeps more money in all parties pockets. That too would be my primary concern.

Record Jackpot Claimed, question!

Editgap — Thu, 10 Nov 2005 02:36:00 GMT

Hey guys the record PB jackpot has be claimed.Quesition. I saw the way the divided up the huge prize amongst winners, family members and relations.Does anyone know whether this is beneficial for tax purposes.