Claiming through a trust

Reply #7

Stack47 — Sun, 12 Aug 2018 20:04:28 GMT

Good point!

We get lots of opinions, but it would be nice if we actually heard from a real jackpot winner that went through the process.

Reply #6

LottoLucy — Sun, 12 Aug 2018 00:49:56 GMT

I didn t think tax avoidance but more like spouse avoidance when I read the question. Of course we know that won t work because if the judge finds you hiding assets they re just as likely to give it all to the spouse so it wouldn t be worth it.

Reply #5

KY Floyd — Sun, 12 Aug 2018 00:17:43 GMT

As Lucys says, If you live in a state that allows you to form a trust and you form an irrevocable trust to claim the prize then the trust files its own tax return but if you receive any income from the trust then you claim that income on your return.

That means it's possible to keep the winnings completely independent of your personal income taxes by not receiving any distribution from the trust. That probably means that you haven't asked what you really want to know.

Reply #4

Stack47 — Sat, 11 Aug 2018 22:27:14 GMT

OK, I'll amend it to at least 24%.

But I believe the question is more about using a trust to avoid or lower the initial tax burden.

The best advice I read lately is go to the press conference, answer a few questions, and leave with your winnings . All that cloak and dagger stuff people suggest puts a large target on the winners back.

Reply #3

music* — Sat, 11 Aug 2018 20:15:33 GMT

The California Lottery deducts 24% for the IRS. California does not tax lottery winnings. California does not allow a winner to use a Trust when claiming your prize.

The Winners Handbook has the info. on the 24% tax.

Reply #2

Stack47 — Sat, 11 Aug 2018 16:02:19 GMT

Every U.S. lottery deducts 25% in Federal taxes right off the top and many deduct state taxes too. After that it's between you and the IRS.

IMO, not very many people would continue their regular lives while sitting on a fortune in lottery winnings.

Reply #1

LottoLucy — Sat, 11 Aug 2018 03:42:59 GMT

This is my very simple answer to a complex question. If you live in a state that allows you to form a trust and you form an irrevocable trust to claim the prize then the trust files its own tax return but if you receive any income from the trust then you claim that income on your return. If you are in one of the states that doesn t allow you to claim in a trust then you could put the money in a trust after you claim the prize but the initial win would be on your tax return and any income you rec... [ More ]

Claiming through a trust

thway25jul — Fri, 10 Aug 2018 04:36:13 GMT

Hi guys

New here . Sorry if this has been posted before.

I was just wondering if you win is there a way to keep the winnings in a trust for a couple of years. i.e. keep the winning out of your personal tax returns.