In Group Winners: can the payout other than split evenly ?

Reply #18

RedStang — Tue, 28 Apr 2015 17:23:48 GMT

We have some in our group that split a ticket so if everyone won a mill, they would get 500k each.

Reply #17

maringoman — Mon, 27 Apr 2015 23:30:15 GMT

This thread got me curious and when I searched around, I found this on the PA Lottery site.

Can a group share a prize?

Individual checks for group prize claims will be issued only for prizes of $50,000 or more where individual shares of the prize are $2,501 or more.

To request individual checks for qualifying group prize claims, winners must indicate on claim forms that they want individual checks. Each member of the group must complete IRS form 5754 to accompany the claim form at the... [ More ]

Reply #16

KY Floyd — Sun, 26 Apr 2015 15:49:42 GMT

Multiple family members can definitely be part of the same pool, but that's not what the OP was asking about. Obviously pools should have a written contract, and it's probably even more important if there are multiple members of the same family in the pool and one of them is running the pool.

Even if you don't have a written agreement the IRS is probably happy enough to believe that if you share a lottery prize with coworkers it's because you had a mutual agreement requiring you to share it,... [ More ]

Reply #15

Stack47 — Sat, 25 Apr 2015 23:16:32 GMT

Maybe it's a Canadian thing, but other than for a possible interesting news conference, it doesn't matter to US state lotteries if members of a pool that wins a jackpot are family, friends, co-workers or whatever. Lots of people run lottery pools that include family and non-family members.

Reply #14

Stack47 — Sat, 25 Apr 2015 22:47:23 GMT

Each state lottery has their own rules on how they distribute shared ticket jackpot prizes and some will give an equal share minus tax deductions. If you are the sole ticket owner, you could have the lottery divide the prize equally among family members in states that allow it. But I know of no US lottery that subdivides individual shares.

If you have ten members in your group and your ticket wins the jackpot, the best you can expect is ten equal individual checks.

Reply #13

Wildpony — Sat, 25 Apr 2015 19:59:41 GMT

My comment was on combining family members and non-family members.

It seems that the family members needs to be in the group instead of the individual group winners saying their share is a family ticket.

It isn't possible to combine the 2 types.

Reply #12

KY Floyd — Sat, 25 Apr 2015 19:50:39 GMT

When claiming the ticket, tell them it was a family ticket. You do not need proof of an agreement

You clearly haven't done enough research.

Reply #11

Wildpony — Sat, 25 Apr 2015 17:48:17 GMT

I think what Stack47 is saying is that whatever the shares paid out to group members that shares theirs with their families is taxable under a different set of rules. Those rules would limit it to the yearly amounts the IRS allows as a gift without double taxes. I think that is $20,000 per family member per year.

What you said is that the family members would have to be included in the group with the amounts set in the agreement, whether that would be by amounts of tickets bought each, a perc... [ More ]

Reply #10

winoneday — Sat, 25 Apr 2015 14:29:31 GMT

Stack47, I do not think you understand how group play works.

Reply #9

Stack47 — Sat, 25 Apr 2015 02:01:52 GMT

Even in the state lotteries that divide the prize equally for a pool, they won't subdivide shares. The taxes on any other money distribution is determined by the IRS rules. The amount paid in and the prize distributions was equal; everybody contributed the same.

From what I read so far, if this pool wins a jackpot, we'll be reading about the lawsuit on LP news.

Reply #8

winoneday — Fri, 24 Apr 2015 20:05:00 GMT

Gifting the money would be a problem. Your best option is to claim they are part of a lottery group. If your intention is to give them money, then you are within the spirit of the law.

Reply #7

Wildpony — Fri, 24 Apr 2015 18:39:55 GMT

I tend to agree with you. I followed Stack47's advice and did more research about lottery lawsuits but found out I had already read them. Most wouldn't apply to this group since it is not a work place setting. The few people in the group is no problem. The family ticket setup also would be no problem.

I wonder if the individual group winners can still somehow give a million or so to family without an IRS penalty. I believe the current gift is $20,000.

Reply #6

winoneday — Fri, 24 Apr 2015 03:10:08 GMT

Yes, my response also applies to California.

You will find many people on this forum are anti-groups. Its like asking them if you should buy a car and they say no because of all the accidents they have read about.

Group agreements do not have to be notarized. A simple signed agreement or even an email is enough to prove intent. Something in writing that is clear in its intent. Groups that have had problems had verbal agreements and confusing rules open to interpretation.

Reply #5

Stack47 — Thu, 23 Apr 2015 20:38:23 GMT

The lottery in the state where you purchase the tickets will give you the accurate information. Some states will only issue one check and it's the bearer's responsibility to distribute the money.

Before you start your group, search the LP news archives and read some of the many stories about group winner lawsuits.

Reply #4

Wildpony — Thu, 23 Apr 2015 20:06:43 GMT

Thanks for your thoughts. I wasn't planning on a yearly accounting, just a month by month like we used to do at work.

I am just wondering if the IRS will try to create a problem with tirered or unequal payout amounts.

I have also read that its a practice to just have the agreement notarized just before you turn in a winning ticket, otherwise its ok to be informal with small amounts.

Reply #3

savagegoose — Thu, 23 Apr 2015 18:52:53 GMT

if you think you need the agreement soon before your pool wins....

welcome to lottery post

oh and get an agreement, like a statutory declaration signed before a JP , before you win explain the share of payments and stick to it

Reply #2

Wildpony — Thu, 23 Apr 2015 17:50:25 GMT

Thanks for that. I see you are from Canada, do you know if your reply applies to California ?

I'm still looking for feedback about the IRS on this setting.

Reply #1

winoneday — Wed, 22 Apr 2015 23:13:03 GMT

Yes to both questions. A member of a group can have multiple shares (supported by an agreement of course).

Yes to helping out family. When claiming the ticket, tell them it was a family ticket. You do not need proof of an agreement even though one is always a good idea. A verbal agreement is enough.

In Group Winners: can the payout other than split evenly ?

Wildpony — Wed, 22 Apr 2015 21:47:41 GMT

I haven't hit yet am looking to set up a group properly.

For instance; can members be paid by a percentage of the total tickets they bought ? Say the total tickets bought is 12 but one member bought 1 ticket, another 3, etc. Can the one member be given 1/12th, the other 3/12ths, etc ? Or does the jackpot have to be split evenly ? Because some members can't afford as much so it would limit the groups chances.

Another instance: I buy the winning ticket but am limited by the state as to how m... [ More ]