Q's re: Gift tax on giving winnings to family

Reply #10

dk1421 — Sat, 20 Aug 2011 02:24:10 GMT

Thanks, JusCurious!

I was planning on doing an LLC, but it's been a while since I've read about it and guess I missed that part - so thank you! That solves all the problems!

And yes, I was also planning on telling them this is it, money-wise. And that if they have any business ideas/etc, they have to get it approved through my board first. This is to prevent me from being the bad guy when they have bad business ideas.

Reply #9

JusCurious — Thu, 18 Aug 2011 17:11:42 GMT

The easiest way to share a jackpot and avoid gift taxes is to form a club or LLC and include those people for whatever share you want to give them. A tax form 5754 is completed with each person's name and share amount. Shares do not have to be equal; you can take 90% and give 5 others 2% each, for example.

When you use this form, the IRS will not dispute it or try to call it a gift.

This method might help in another way, too: Tell each recipient: This is IT. Use it wisely, as I will N... [ More ]

Reply #8

ttech10 — Thu, 28 Jul 2011 17:56:54 GMT

Why wouldn't my two solutions work?

I know for a fact the first one that includes adding people to your LLC/trust works because it's exactly what large lottery groups use. There's nobody there that can say we weren't in a group and the percentages can be judged by how much per month someone put in. Now yea, it may not be the truth but they can't prove it isn't. All that would happen is the regular income tax (which I believe is the same if you do $5 million to 5 people as it would be just $25... [ More ]

Reply #7

sully16 — Thu, 28 Jul 2011 17:20:42 GMT

Everyone should read the Rise and fall of the Roman Empire ,

Reply #6

Jack-C — Thu, 28 Jul 2011 17:18:23 GMT

Reply #5

rdgrnr — Thu, 28 Jul 2011 17:14:59 GMT

I never cease to be amazed at how casually we discuss issues like this.

Issues about how much we owe the government if we want to give a gift to a family member.

I always wonder where the people were when our elected officials did these kinds of things to us.

Why did they let them get away with it and why do we continue to let them get away with it?

They talk about entitlements killing us (and it's true) while they are the biggest entity of entitlement the world has ever known. They... [ More ]

Reply #4

Raven62 — Thu, 28 Jul 2011 16:24:39 GMT

Annual gifts in excess of $13,000 are not subject to the gift tax if they are paid directly for the donee's tuition or medical expenses. Check with a Competent Tax Advisor.

You may give any one person up to $13,000 in total gifts without filing a gift tax return (from 2009 2011). This limit includes all gifts for the year, not just money or property. It includes birthdays, graduations, holidays, etc. (The limit was $12,000 from 2006-2008; $11,000 from 2002-2005.)

For 2011 to 2012, th... [ More ]

Reply #3

Jack-C — Thu, 28 Jul 2011 14:45:46 GMT

So much of what has been suggested in this thread won't work (IMHO). When you win, get a good Estate Attorney. He/She will be able to do everything right.

Reply #2

sully16 — Thu, 28 Jul 2011 14:29:45 GMT

If it were me I'd take cash withdrawals, what I do with my cash is my business.

Reply #1

ttech10 — Thu, 28 Jul 2011 03:43:42 GMT

I've thought of two different things to be able to give family members money.

The first is having different family members be a part of the LLC/trust. I think it may work to where it's simply a dividing up of the lottery payout to different people, rather than the money simply being a gift. I believe it's essentially what the lottery groups do and they only pay the income tax percentage so I don't see why you can't just say that the certain family members were all part of a group, with you th... [ More ]

Q's re: Gift tax on giving winnings to family

dk1421 — Thu, 28 Jul 2011 02:03:53 GMT

Hey All!

Just a few questions about AFTER I win the lottery.

First off, I'm planning on doing an LLC, if I can in NC. It used to say on the website you could, but now it doesn't say anything at all.

I'm hoping to give half my money away, mostly to family, some to charities. I know you can give someone up to $13,000 without having to pay taxes. I know both my spouse and I can give a gift to the same person (meaning a total of $26,000), but if we are doing an LLC, then I think we can only... [ More ]