Can IRS make you pay taxes if you give lottery tickets as gifts?

Reply #21

stephi — Thu, 07 Jun 2007 12:56:53 GMT

thank you all for your information, it is very helpful and i appreciate it.

Reply #20

emilyg — Thu, 07 Jun 2007 06:19:31 GMT

Funny. I said just that to my grandsons tonight.

Reply #19

Stack47 — Thu, 07 Jun 2007 05:34:26 GMT

LMAO

Reply #18

justxploring — Thu, 07 Jun 2007 05:27:46 GMT

Coin Toss,

I can just see it now.

Coin Toss: Justxploring gave me that ticket. I don't owe tax on the $2M - she does!

JustX: No, Coin Toss was in my home last month and he must have stolen it from my purse! It's my money! It belongs to me!

Pac, They're both lying, Your Honor. I swear that's the ticket I bought on the way home from the airport. I must have dropped it in my limousine. She's the lady I picked up at Southwest FL International.

Psykomo: quick picks... [ More ]

Reply #17

Coin Toss — Thu, 07 Jun 2007 04:43:14 GMT

If someone who gave a lottery ticket that turned out to be a big winner was the person who would be taxed on the winings, then jackpot winners could just pick names out of phone books and say that person gave them the ticket as a gift.

Or simply name anyone at random.

I'd like to thank the director of the _ _ _ _ lotto for giving me this ticket

I'd like to thank the governor of _ _ _ _ _ _ _ for the ticket that won the jackpot

Reply #16

Cr4zyH0rs3 — Thu, 07 Jun 2007 03:57:32 GMT

No wonder why some fam members say if you give it to make as a gift, they want me to pay for their taxes..Dirty Rats

Reply #15

LuckyLilly — Thu, 07 Jun 2007 03:51:26 GMT

Just because he asked for a 1099 that reflected fair market value? Or for other things

Reply #14

guesser — Thu, 07 Jun 2007 03:47:12 GMT

I had a friend that won something like $25,000 in tools and lawn/gardening equipment from a radio station.

If he went out and bought it all, it MIGHT have cost him $10,000, but they 1099'd him for $25,000.

He ended up somehow negotiating it down to about 10K, but what's funny was, about 3 months after that, me and the wife were at a nice restaurant having a dinner, and sitting at the table next to us were execs from the radio station, and all they did was talk about my friend that won all... [ More ]

Reply #13

Stack47 — Thu, 07 Jun 2007 03:38:52 GMT

Asking where the bearer got the ticket is a standard part of the validation process for tickets winning substantial prizes.

Are you sure about that because I can't find asking that anywhere in the Ohio Administrated Code Lottery procedures under Claiming Winning Prizes?

Not knowing when or where the ticket was bought is exactly what is expected if the ticket was stolen or reported as lost.

And that's why I said unless there is a dispute .

A couple ecstatically walks into the lot... [ More ]

Reply #12

KY Floyd — Thu, 07 Jun 2007 01:09:33 GMT

Apparently the IRS decided they were prizes and not gifts. They stopped doing it years ago, but Wheel of Fortune used to give away $30,000 watches and similar prizes in the bonus round. I'm sure every contestant who was making 25 or 30 grand a year was thrilled to win 6 grand in cash, and then end up owing another 3 or 4 grand so they could have a watch they couldn't afford.

Reply #11

KY Floyd — Thu, 07 Jun 2007 01:05:13 GMT

Asking where the bearer got the ticket is a standard part of the validation process for tickets winning substantial prizes. Of course the lottery knows where the ticket was sold, but the righful owner should also know, or they should say they don't know because they got the ticket as a gift, or whatever other reason would prevent them from knowing. Not knowing when or where the ticket was bought is exactly what is expected if the ticket was stolen or reported as lost. If you remember the case ab... [ More ]

Reply #10

RJOh — Thu, 07 Jun 2007 01:04:11 GMT

When Oprah gave away all those cars on her show last some of her guess have to take out a loan to pay the taxes on their free car.

Reply #9

RJOh — Thu, 07 Jun 2007 00:55:39 GMT

Gift taxes kick in at $12K so if you bought over $12K worth of lottery tickets for someone as a gift then you might owe some gift taxes however if you gave someone a $1 or $5 lottery ticket that turned out to be worth $12K+, it was only worth that after they cashed it in. When you gave it to them it was only worth what you paid for it and value was only added when they cashed it in.

Reply #8

KY Floyd — Thu, 07 Jun 2007 00:55:13 GMT

It has nothing to do with the ticket being a bearer bond, or anything like that. If you buy a lottery ticket for $1 or $50 and give it as a gift before it becomes worth more than what you paid, then you are giving a gift that is worth what you paid for it. If for some reason you did give away a ticket after finding out that it was a winner, then you'd be giving a gift that had the value of the prize and you could potentialy owe gift tax. Of course as apractical matter, only an idiot would give s... [ More ]

Reply #7

justxploring — Thu, 07 Jun 2007 00:40:25 GMT

I know what you mean. I went through that when I'd win sales contests. I'd always say Show me the money!! Who wants an ice bucket or a tee shirt with a company name? Once I won a desk with a retail price of $1,200. I had no place to put it anyway, but I also didn't want to be stuck with the tax so I asked for money instead. I didn't get close to $1,200 and, yes, I did pay tax on the money, but when you win gifts as bonuses instead of cash, they're often not worth the estimated value, whic... [ More ]

Reply #6

justxploring — Thu, 07 Jun 2007 00:29:22 GMT

As long as no money changes hands, you would not be responsible to pay any tax. The ticket had no monetary value (except for $1) when you bought it or gave it away.

I've been seeing that $12,000 figure we toss around on this board a lot. It IS NOT the maximum you can give. (this is reminding me of the latest debate about the $600 reported by the lottery!) You just have to report any gift exceeding this amount to the IRS. You can give away up to $1 million in your lifetime without payin... [ More ]

Reply #5

OldSchoolPa — Thu, 07 Jun 2007 00:06:56 GMT

Coin Toss is right on...all lottery tickets are bearers instruments; thus the particular name of the bearer printed and signed on that lottery ticket is responsible for all associated taxes regardless of who actually purchased the ticket. As such, someone who opted to gift to others after claiming a prize themselves would be responsible for any gift taxes for amounts over the allowed gifting limit (FYI $10K or $12K is not the limit; if someone has the ability to do so, they possibly could gift

Reply #4

guesser — Thu, 07 Jun 2007 00:04:20 GMT

I would not think so.

Reson being, I worked for a company a few years ago that used to give employees that met a certain (high-dollar) sales quota gifts such as golf clubs, or a putter, or an umbrella, pen/pencil sets, etc. but we also had to 1099 them for anything we gave them.

A lot of the folks turned down the gifts and told us to just keep them, they didn't want the hassle of a $30 1099'enble item.

Reply #3

Coin Toss — Wed, 06 Jun 2007 21:52:45 GMT

Whoever cashes the ticket pays the tax if arrangements aren't made before hand (such as someone representing a multi=person trust). Before the lottery makes out the check, who do you think they are going to ask to produce ID?

Somewhere there's a thread here about this and someone posted an example of it costing a jackpot winner $34,000 to give smeon a gift that was over the $12,000 allowed annually.

Reply #2

LuckyLilly — Wed, 06 Jun 2007 21:32:11 GMT

Oh, that's a scary thought! I bet since the ticket was only worth $1 or so at the time the gift was made, you wouldn't owe a gift tax. It increased in value between the time you gave it and the time of the drawing so the increase in value would be the recipients responsibility to pay taxes on.

However, what if you knew a ticket was a winner and gave it away AFTER the value had already increased. Say you were playing different combos of the same powerball numbers, so you had 3 or 4 that mat... [ More ]

Reply #1

Stack47 — Wed, 06 Jun 2007 20:49:17 GMT

Since they have to tell the office where they got the ticket from then they would have to say that I gave them the ticket,

The lottery would already know where the ticket came from so unless there was an ownership dispute, there would be no reason for them to ask where they got the ticket.

would i have to pay any gift taxes?

I'm not sure if you could claim the cost of the ticket as a gift and use it as a deduction but you pay taxes on your income not what you spend.

Can IRS make you pay taxes if you give lottery tickets as gifts?

stephi — Wed, 06 Jun 2007 19:12:31 GMT

Just curious. Suppose I gave someone a lottery ticket and it hit the jackpot. Since they have to tell the office where they got the ticket from then they would have to say that I gave them the ticket, would i have to pay any gift taxes? or would the office just write the person down as the ticketholder and i wouldn't have to have anything to do with it? also was wondering if the ticket buyer has to go with the ticket holder to the office to claim? thank you.