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Understanding Euromillions taxes for U.S.

Topic closed. 22 replies. Last post 11 years ago by BaristaExpress.

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time*treat's avatar - radar

United States
Member #13130
March 30, 2005
2171 Posts
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Posted: January 25, 2006, 9:44 pm - IP Logged

Given the high JP for Euromillions, I have been trying to figure out the best way to minimize income taxes and maximize interest income while still living in the U.S.  I know that the actual JP is tax-free in Europe and that if the entire amount is brought into the U.S., then it is taxable.  My question is if the JP money is left in Euros in a Swiss bank and is invested in European securities, then theoretically, the principal JP will never be taxed, only the interest income that is generated would be taxed, right?

 I ask the question, because I contacted the IRS and they told me that all income (global or domestic) is subject to income tax and must be reported on my tax return.  Gambling winnings (including lottery winnings) are classified as income, therefore according to the IRS, I would be taxed on the prinicpal JP even if I left it in a European bank, plus I would be taxed on any interest income.

So, assuming that what the IRS told me was correct and by my calculations, I would need to earn about 9% on my European investments on the taxed JP to match a 4% tax-free investment return in the US (municipal bonds and other triple tax free investments). 

If I am not taxed on the full JP but only on the interest income, then I would only need about a 5.3% European return - which leaves more room for a greater income generating potential.  Plus, by leaving the prinicipal in Euros, I can lever the increasing strength of the Euro to the weakening dollar when I do decide to convert the currency and bring some money into the U.S.

Does anyone have better information than I have been able to find?  I am working on the assumption of being totally honest and not hiding money, though I always enjoy the "creative" solutions that LP members come up with.

Currently, U.S. citizens are taxed on foreign and domestic income, whether they reside in the states or not, with certain deductions as mentioned. Charities, foundations, and 503c's are treated differently. If you want to steward the money, this may be something to look into. If you look at large companies and wealthy athletes, many have a "foundation" named after them, and do their charity work, scholarship programs, donations to public broadcasting Smile, sports camps, etc. through them. Given the paperwork involved with these types of things, there must be some advantages over direct handouts. Good luck.

In neo-conned Amerika, bank robs you.
Alcohol, Tobacco, and Firearms should be the name of a convenience store, not a govnoment agency.

    dvdiva's avatar - 8ball

    United States
    Member #2338
    September 17, 2003
    2063 Posts
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    Posted: January 25, 2006, 11:32 pm - IP Logged

    If you were to win an overseas lottery why would you want to continue to live in America but not contribute to it in the form of taxation at the going rate? Taxation is part of the responsibility of being a U.S. citizen. Sure people don't enjoy paying taxes. But compared to the rest of the world the USA is a very comfortable society because of its infrastructure and public services and tax dollars go towards these. Tax dollars also get redistributed to help people on low wages and their families; people in their millions. Taxes also go towards paying for the military and other programs which Americans take for granted. Your avatar has a cross with the logo "All for Jesus". In your case you should change it to a dollar sign and say "All for Me".

    So the reason people like Senators Kerry, Kennedy and other non senatorial rich people have offshore trusts is because they don't love america? Or is it that they just peddle their redistribution scheme to those foolish enough to buy in to it. High tax rates punish the new rich and small business owners.

    I have had low wage jobs my entire life and have yet to see this "redistributed" BS you are talking about. While I have no hope of ever owning a house I don't expect the government to come to my rescue.
     In countries that do have higher tax like in Europe there are still multi-generation rich people that never work but with a much higher unemployment rate and a lower standard of living for everyone else. I suggest you take an Economics class with an open mind.

      danisiri's avatar - Avatar all_for_Jesus.jpg

      United States
      Member #13684
      April 11, 2005
      77 Posts
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      Posted: January 25, 2006, 11:57 pm - IP Logged

      If you were to win an overseas lottery why would you want to continue to live in America but not contribute to it in the form of taxation at the going rate? Taxation is part of the responsibility of being a U.S. citizen. Sure people don't enjoy paying taxes. But compared to the rest of the world the USA is a very comfortable society because of its infrastructure and public services and tax dollars go towards these. Tax dollars also get redistributed to help people on low wages and their families; people in their millions. Taxes also go towards paying for the military and other programs which Americans take for granted. Your avatar has a cross with the logo "All for Jesus". In your case you should change it to a dollar sign and say "All for Me".

      I think you missed the point of this hypothetical discussion and by the honesty disclaimer on my initial posting.  I have no problem paying taxes, but I do not want to be fleeced by our already over zealous federal and state governments.   

      Alas, the money would not be all for me.  In fact, it would be "none for me", since the reason that I play the lottery at all is to meet the needs of others.  As for as my needs, I am already taken care of by my Savior (John 3:16, Matthew 6).  I need nothing more.  Yet, I can only do so much or reach only so many people with the limited time and income that I have.  With a gift from God of a larger financial base as a resource, my ministries would be able to expand.  Yet, the ministries can still expand without the money, since all things are possible with Him and through Him.  Indeed expansion without the money would be an even greater testament to His power and glory, since with the money, people can just say "oh, well the funding comes from a lottery win."

      As for taxes, I feel the U.S. government has overstepped its bounds in taxation and has become a bloated bureaucracy that wastes too much money.  Our country has moved from the freedom-based republic created by the founding fathers to a socialist democracy where wealth is taken by force and redistributed by lawmakers whose primary objective is to keep their constituents happy with pork to get themselves re-elected.

      I know for certain that I could do a better job in stewardship.  The Biblical model for taking care of the poor and needy was for people to help them directly, not to give all their money to the government and have it do it.  By doing the work yourself, you are blessed with having blessed someone else.  So in fact, it is a double blessing.

      My avatar "All for Jesus" with the Cross on it has a two-fold meaning.  The Cross represents what He has done for me and the "All for Jesus" means every quark of my being, every work, every cent, every breath is for Him.  All that I currently have is God's.  All that He gives me in the future is really His anyways.  The question people should ask themselves is not how much do I have to give back to God but rather how much of God's resources would I dare keep for myself? 

      Normally, LP is a nice place to discuss topics in an intellectual manner.  Everytime people try to start flame wars, I usually stay away for awhile.  I thought perhaps this time would be different, but I guess I should just learn that I am bound to be attacked personally no matter what I discuss.  But, hey, I do not really care what you think of me or how much you want to belittle me because of my views.  The last time I checked, Todd still allowed people to voice their opinions on lottery topics here at LP and I was just trying to get an interesting discussion going.

      But, uh, oh well, so much for that. 

      Take care and God bless!

      You wrote: "But, hey, I do not really care what you think of me..."

      Really? So then why did you write eight paragraphs and quote scripture if you really don't care?

      You wrote: "All that I currently have is God's. All that He gives me in the future is really His anyways. The question people should ask themselves is not how much do I have to give back to God but rather how much of God's resources would I dare keep for myself?"

      Jesus said: "Go and sell ALL that thou hast, and give it to the poor; and come and follow me." 

      From your original remarks of seeking advice on tax avoidance using off shore bank accounts it is very clear you are quite prepared to keep everything you get strictly for yourself. If you really want to pick up your cross then give away all the money and assets you currently own to the poor. And remember that every little bit helps so don't say the challenge is too great and therefore you won't do it. There are plenty of well established charities of every single denomination out there too so you don't need to set up your own "ministry" first to channel funds or complain that government redistribution is socialist or inefficient.

      Few people actually give away all they have to the poor because most people realize that doing so would force them to join the ranks of the poor. Jesus lived a life of poverty and if you are a true beliver then you will as well.

      Greed comes in many ways and trying to hide it by praying to a divine power for vast sums of money as well as telling others far and wide that you'll use such a huge fortune to help others really doesn't wash. Bill Gates and other wealthy philanthropists have already beat you to the punch on that so you don't need to wait to you are filthy rich to start giving.

      God doesn't dare us to keep anything. I dare you though to give all you own now away because you know yourself there many people out there who are in greater need for your belongings.

      Eye of the Needle, buddy, Eye of the Needle. But take the log out of your own eye first; it should help you see life a lot more clearly. 

      Well, thanks to everyone that contributed constructive information to this hypothetical question.  I apologize for this thread turning into another flame war.  I just wanted intellectual and enjoyable discussion.

      A most sincere thanks to all...especially to phokas!

      Wink

        dvdiva's avatar - 8ball

        United States
        Member #2338
        September 17, 2003
        2063 Posts
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        Posted: January 25, 2006, 11:59 pm - IP Logged

        No real flame war. It's just a lot harder to win a jackpot than to plan for one.

          BaristaExpress's avatar - BaristaExpressMX zpsfb0d8b5d.png
          Magnolia, Delaware
          United States
          Member #18795
          July 20, 2005
          789 Posts
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          Posted: January 26, 2006, 12:06 am - IP Logged

          Phokas, How does my living in Delaware make a difference about being taxed fairly? I have nothing to do with what the State did about state sales taxes before I moved here in 2001! They did it not me, so your barking up the wrong tree! If you have a problem about what the state of Delaware is doing about state sales taxes, then write them and voice your opinion and complain about it to them and the laws they passed about not collecting a state sales tax! Not Me. Oh and while you're at it, why not write the state of Alaska and Nevada, just to name a few more for you to write too! Alaska doesn't tax your income and nor does Nevada, Go climb on their backs for not being American enough to collect income taxes on who live in their states!

          Honestly Phokas, you sound like the generation that has always had everything handed to them! But now, you are on your own and you have to struggle for everything and it pisses you off that it's so hard! Well, to bad, we all had to fight to get what we have and fight even harder to keep it, if you wanted to be called middle class! And you know what, that's called life in The United States, deal with it or crawl into a hole somewhere and die! But don't blame the generations before you for this countries debt you and your kids and their kids are going to have to pay back with some sweat! Because we baby boomer's had to do it and now you are going to cry that you have to do it! To Bad, Get Over It and do what every generation before you had to do! But I guess that's to hard for you, the snot nosed gimme everything easy generation! Phokas, you have clearly and completely displayed that you truly are oblivious to everything around you or you have just shown your complete ignorance about what you are going to have do in this life and like it! Either way you're going to do it, it's that simple! And I'll remind you just one more time, That's called life in The United States! 

          Keep dreaming the impossible dream, it just may come true! Thumbs Up


            United States
            Member #5122
            June 18, 2004
            68 Posts
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            Posted: January 26, 2006, 7:30 pm - IP Logged

            You got some serious issues. Obviously I got way too close to the truth for your comfort level. Making death threats certainly doesn't make you a sound person. Get help, you really need it.

            But lets look at something you said "...you sound like the generation that has always had everything handed to them! But now, you are on your own and you have to struggle for everything and it pisses you off that it's so hard!"

            How can someone who has, as you claim, had everyhing handed to him now have to struggle for everything? Your statement makes no sense. You should try being sober next time you post on here.

            And are you seriously going to suggest that the huge disparity in pay between rich and poor in this country, massive economic deficits, over dependence of foreign oil, global warming, and involvement in one conflict after another since your generation lost Viet Nam that subsequent generations have to pay all that off? You're still stoned from Woodstock! Your generation did nothing for this country. N-O-T-H-I-N-G! And now that you head off to retirement your generation sends U.S. jobs overseas just to make sure no one else has a future.

            Your generation is the one that took everything like locust and made sure nothing would be left behind for future generations.

            You really need to read what is said before you start rambling. You're the one complaining about being taxed too much and yet live in a state that has lower taxes than most. The fact that you have more by not being taxed makes you better off than others. But you speak loudly for your generation; take everying and give nothing back oh and be sure to blame someone else. Was every Baby Boomer and only child? I've never encountered so many people who act so spoiled and are still dissatisfied.

            But anyway. I'm sure you were way too stoned when Kennedy was speaking but believe me he did not say "Ask not what you can do for your country, ask what your country can do for you." 

             


              United States
              Member #5122
              June 18, 2004
              68 Posts
              Offline
              Posted: January 26, 2006, 7:57 pm - IP Logged

              If you were to win an overseas lottery why would you want to continue to live in America but not contribute to it in the form of taxation at the going rate? Taxation is part of the responsibility of being a U.S. citizen. Sure people don't enjoy paying taxes. But compared to the rest of the world the USA is a very comfortable society because of its infrastructure and public services and tax dollars go towards these. Tax dollars also get redistributed to help people on low wages and their families; people in their millions. Taxes also go towards paying for the military and other programs which Americans take for granted. Your avatar has a cross with the logo "All for Jesus". In your case you should change it to a dollar sign and say "All for Me".

              So the reason people like Senators Kerry, Kennedy and other non senatorial rich people have offshore trusts is because they don't love america? Or is it that they just peddle their redistribution scheme to those foolish enough to buy in to it. High tax rates punish the new rich and small business owners.

              I have had low wage jobs my entire life and have yet to see this "redistributed" BS you are talking about. While I have no hope of ever owning a house I don't expect the government to come to my rescue.
               In countries that do have higher tax like in Europe there are still multi-generation rich people that never work but with a much higher unemployment rate and a lower standard of living for everyone else. I suggest you take an Economics class with an open mind.

              You said: "I have...yet to see this "redistributed" BS you are talking about. "

              And so what? You never heard of a tax return? You never heard of social security or unemployment benefits or educational grants?

              Listen, such programs are there to help people along not make people rich over night.

              Like I said previously, most people take such things for granted. In many other countries they don't have such assistance of any sort from anyone. But we do. It's better than nothing. And people in other countries know this. That's why they come here in their droves. For the opportunites and the benefits.

              Some might believe that unbridled capitalism, and not any kind of government planning, is the only solution to the ills in American society. Then fine, like true communists, we will abolish government and leave an unelected group of unaccountable people run things. How about we turn everything over to the people who were running things at Enron, Tyco, Adelphia, Global Crossing, Halliburton, WorldCom, Qwest, etc.? Hmmm, maybe we should wait until they're no longer being investigated or have completed their prison sentences.

              High tax rates punish people? Let's look at a country like Russia where people notoriously avoid paying taxes and many oligarchs siphoned their riches into off shore accounts. You really think our infrastructure would be what it is today if no one paid into it?

              You may think you have an open mind but your view points are very provincial.

                BaristaExpress's avatar - BaristaExpressMX zpsfb0d8b5d.png
                Magnolia, Delaware
                United States
                Member #18795
                July 20, 2005
                789 Posts
                Offline
                Posted: January 26, 2006, 8:45 pm - IP Logged

                You got some serious issues. Obviously I got way too close to the truth for your comfort level. Making death threats certainly doesn't make you a sound person. Get help, you really need it.

                But lets look at something you said "...you sound like the generation that has always had everything handed to them! But now, you are on your own and you have to struggle for everything and it pisses you off that it's so hard!"

                How can someone who has, as you claim, had everyhing handed to him now have to struggle for everything? Your statement makes no sense. You should try being sober next time you post on here.

                And are you seriously going to suggest that the huge disparity in pay between rich and poor in this country, massive economic deficits, over dependence of foreign oil, global warming, and involvement in one conflict after another since your generation lost Viet Nam that subsequent generations have to pay all that off? You're still stoned from Woodstock! Your generation did nothing for this country. N-O-T-H-I-N-G! And now that you head off to retirement your generation sends U.S. jobs overseas just to make sure no one else has a future.

                Your generation is the one that took everything like locust and made sure nothing would be left behind for future generations.

                You really need to read what is said before you start rambling. You're the one complaining about being taxed too much and yet live in a state that has lower taxes than most. The fact that you have more by not being taxed makes you better off than others. But you speak loudly for your generation; take everying and give nothing back oh and be sure to blame someone else. Was every Baby Boomer and only child? I've never encountered so many people who act so spoiled and are still dissatisfied.

                But anyway. I'm sure you were way too stoned when Kennedy was speaking but believe me he did not say "Ask not what you can do for your country, ask what your country can do for you." 

                 

                Phokas, I never made any DEATH THREATS to you or anyone else! Just for your information, you couldn't be further from any truth of any kind! The only person here that has SERIOUS ISSUES here IS YOU! And talking about being drunk or stoned, You better get your head out of the Clouds or the bottle! Which is it? You really are disturbed and it shows! Reading things that wasn't said in any way shape or form, really shows that you are delusional and in need of HELP! Stop denying it any longer and go get the help you seriously need! And may God have mercy on your soul!

                Keep dreaming the impossible dream, it just may come true! Thumbs Up