This topic is of interest to all Lottery Post members, whether you are for cash (lump sum) or Annuity. Todays Washington Post (go to www.washingtonpost.com) in the business section under the Cash Flow Subject/title. Several issues come up in this article, one is the number of winners who opt for annuity and then in a year or two sell their annual payments to a rip off but legal entity who gets a big chunk of their winnings. The woman example won $17.5 in 26 payments. She sold her annuity payments for $7.1 in 1997. Her tax/legal people advised her to file for long term capital gains and the IRS denied this and required another cut of $1.3 from her. She lost her court case.
These issues bother me.
1. The number of people who opt for annuity and then a year or two later they sell and lose money. They then have to endure another cut of tax money. This is so unwise. Its giving money to these companies and more to uncle sam.
2. There have been as quoted in the article more than 6 or better cases like this in recent years.
I am for lump sum, but I offer this topic and article because after all the humor of "I'm for lump, or I'm for annuity," the real issue is many winners are losing out the back door. To be paying Uncle Sam another lump sum payment after winning a jackpot is a bad business decision. Giving millions to a company that is on the sidelines waiting to profit off of the Annuity Winners is an even worst decision. Wake up and smell the coffee and take the lump sum payment.