The $196 million lottery prize for a Mega Millions ticket sold in the Clermont County village of Amelia in May was claimed Friday by a lawyer on behalf of an undisclosed client.
The ticket was submitted for The Anthony Trust, said a spokeswoman for the Ohio Lottery.
The name of the winner is known to Ohio officials, who will check for possible unpaid child support or unpaid state taxes, said Ohio Lottery spokeswoman Marie Kilbane.
An exception to the Ohio Public Records Act means state officials don't have to reveal the identity of the winner if a so-called blind trust is created, Kilbane said.
"Not every state has it," Kilbane said of a procedure for setting up such a trust for lottery winners. "Here in Ohio, it's a way that players can keep their anonymity. It's typically only done for extremely high prize winnings."
The winner opted for 26 annual payments. The first one, for $5.2 million after $2.3 million in federal and state taxes are withheld, should be made within 30 days, Kilbane said.
The winner will then receive $7,538,000 annually for 25 years — before taxes. The amount withheld from those payments could change, Kilbane said.
A winning ticket has been sold in Ohio 11 times since Mega Millions started May 15, 2002, Kilbane said. Seven of those winning tickets were submitted on behalf of trusts.
The address for the May winner's trust was 1900 Fifth Third Center, 511 Walnut St. in Cincinnati, Kilbane said. That's the address of the law firm of Graydon Head & Ritchey.
The attorney representing the trust was Christine A. Buttress, a partner in the law firm. She has practiced law in the area of estate planning for more than 25 years, according to her company resume. Her voice mail said she would be unavailable for several days.
Buttress appeared at the Ohio Lottery's headquarters in Cleveland on Friday morning to complete the claim, Kilbane said.
Amelia Mayor Leroy Ellington said he had no idea who the winner might be or whether the person lived in the village of about 4,000 residents.
"Whoever won, if they did live in the village, my guess is they don't live in the village now — maybe Florida, a place with an ocean breeze," Ellington said.
Whoever bought the ticket will have to continue to pay state taxes on the winnings even if the person doesn't live in Ohio or moves to a state without a personal income tax — such as Florida, said John Kohlstrand, spokesman for the Ohio Department of Taxation.
"It counts as Ohio income," Kohlstrand said.
It shouldn't be an issue that the identity of the winner isn't made public, he said.
"Oh, we'll know," Kohlstrand said. "We're the Tax Department."
Village Council expects to receive a recommendation July 7 from a committee studying whether Amelia should impose a 1 percent earnings tax for those who live or work there, Ellington said.
It had been discussed before the lottery ticket was sold. If such a tax had been in place when the ticket was sold, Amelia could have shared in the winnings, village officials said. Amelia's annual budget is about $2.8 million.
"I'm happy for whoever it is — a bit jealous — but happy for them," Ellington said. "If I won $1 million, I would just run down and claim it. But $196 million, I don't blame them for being discreet."
The ticket was sold May 16 at Main Street Wine & Spirits in Amelia. It was an auto-pick. Among the five chances played was a line with the winning numbers: 6, 11, 39, 46, 47, with Mega Ball 26.
"I'm happy for whoever it was," said Mike Goldstein, who owns the place with his wife, Barby. The store received $100,000 from the Ohio Lottery for selling the ticket.
Goldstein declined to discuss whether the person who bought the winning ticket could be identified on video from store security cameras.
Very intelligent person to claim the winnings in a blind trust.Must be a fairly young person,too,seeing as they chose the annuity.I think that all lotterys should allow the winners to claim prizes without giving the names to the press.
Yeah, 7.5 mil./yr. is hardly enough to buy a bag of rice and a can of corn these days. Aaaaaaaaagh!!!!! Why was it not ME!?!?!? When am I gonna win???????? Booooooooohoooooooo I never win!!!!!!!!
I always groan when it's in Ohio, the only time it was any fun was when the "Battle" situation occurred. I get kind of bored with these BlinD TrusT things. Might as well have said, the last jackpot was 196M, the next one will be 12M, not even bother to say anyone won... then it would be even more secret! Don't even say what State they were in or the store that sold it.. you wouldn't want mobs of people flocking to the Store thinking they might be next!
Wow! Thats a long wait! I guess they choose what would be best for them. I can see the anonymous thing, but man,there goes my story reading.lol Hope they have a blast!!!! I would totally be booking a flight somewhere tropical right now!
Figured that winner was going to claim anonymously but then they chose the annuity over the lump sum and good for them for doing it but I wonder why it took so long, maybe they did move in that time? But young or not, IMO it wasn't very wise taking annuity since now they're going to be paying taxes on it for the next 26 years and now the town wants a piece of it too. Even 1% is going to result a nice chunk of change for an area they probably won't even be living in anymore, not to mention having to continue to pay state taxes as well as federal taxes that'll certainly go up during that time. At least with the lump sum you get it all out of the way at once and can safely invest it in something low risk and pay less (at least now) on whatever dividends you may get. In 26 years they certainly could turn the 70 or so million they would have after taking the cash and paying taxes into a much higher amount than what the annuitized jackpot was. Then again, maybe they're a financial idiot who would have gone broke if they did take it all at once. Oh well, don't matter hope they enjoy the next 26 years and don't screw it up.
Ohio gets to collect income tax on all of it, whether they take it as a lump sum or annuity. It's just a question of whether they collect it all now or a bit each year. The village can enact any kind of tax they want. The income doesn't come from the village, so if the winner doesn't live there in the future they won't have to pay the tax.
D'oh! Yeah, you're right, I wrote that after just waking up and wasn't fully awake yet, it should have read more along the lines of how the the area would be trying to cash in on it if that person stayed in the area, which then they would have to pay it.. As for the state taxes, of course in 26 years time they would pay less each year but the state could raise the tax and then they'd have to pay more, same with the federal, I doubt either will be lowering any time soon and wouldn't be surprised to see the Federal Income Tax go up within the next two or three years. I still think they might have been better off taking the lump sum though.
Come forward you wuss. How do we know it was a legitimate win and not a lottery scam? Claiming it this way makes me determined to find out who it is, otherwise I would have forgotten the name by tomorrow. Claiming anonymously is not so great after all is it?
Good for this person. I hope they stay smart and the money lasts for generations.
I don't agree though on the annuity. I'm with DC. It would have to be somewhere in the $300m range before I would consider the annuity, regardless of age. Then again, it may be right for this person.
Quote: Originally posted by sirbrad on Jun 28, 2008
Come forward you wuss. How do we know it was a legitimate win and not a lottery scam? Claiming it this way makes me determined to find out who it is, otherwise I would have forgotten the name by tomorrow. Claiming anonymously is not so great after all is it?
Anyone who remembers the younger couple (at least she was. . .maybe like 27) who won the $20M jackpot in the Canandian Lottery will also remember the story that appeared a few months after their win about some guy who hatched a plan to kidnap the family to extort their money and then kill them all so as not to be identified. . .or maybe we could remember Bud Post's brother who was attempting to hire a hit man to revenge what the brother thought was not enough of a gift. . .or the thousands of reguests that well publicized Jackpot winners are deluged with. . .or Jack Whitaker's famous (infamous) hijinks, lawsuits, and tragedies that a huge Jackpot brought to him.
I could well imagine why many lottery winners wish to remain anonymous. . .so they don't end up as a cautionary tale on some new 'Curse of the Lottery Winners' show on 'E' or 'A&E' or some other cable show looking for fodder during a slow holiday weekend. And who can (if they were members) forget the heated discussion about 'Bunky and the Lottery Win' about a year ago--lots of people here mocking him (although most, if I remember correctly, defended him)
Some people can handle the intense scrutiny that a Jackpot win brings them and others cannot--I'm no LotteryWinner but I already had a mooch threaten to hurt my parents if I didn't give him 100K of their money just before a con man got hold of them and had them liquidate 75% of their estate and give it to him to "invest". The guy that threatened AND the conman are BOTH in prison, but my parents' retirement money was never retrieved. . .I've learned that if you have $1 more than the next guy then that guy will ask you for some of it and then threaten if you still say no.
If I EVER won--I would make most members of my family and my SO's family minor partners and let them know that was IT. . .move my parents. . .one time gift our friends and then just travel til the brouhaha died down. Then I would return to my home state and set up educational projects in the schools and prisons in my community so as to provide gainful employment to those who are chronically unemployed in the only area of growth in the next five years--development of green energy sources. I believe that gainful employment would have prevented the guy from threatening my parents. . .as for the conman. . .well I later found out that he had dome the same thing to his parents, his parents' friends, his brother (who had given him a job in brother's company), his brother's friends and other people like my parents who were essentially strangers. . . so prison is the only place for that guy where he cannot hurt any other family.
I wouldn't even need strangers for that sort of thing, I've got a family full of crooks. At least with anonymity my name wouldn't be in the paper and spread over the internet for millions of people to see and read. I'd just want to keep the list of potential ******** to a minimum. But, as soon as things are set up and the claim is made, I'm gone soon after that. Though I'd probably wait a little longer just to make it less obvious since it'd probably be a little dumb to go through the trouble just to go and make it obvious with disappearing right away. I think I could make way with buying a new vehicle as long as it wasn't something flashy. Still, I'm sure word would get out, oh well.... Actually there's not many people I know that I'd feel it worth paying a ransom for, especially when half my family would probably fake such a thing. As for coming after me like what happened with Bud Post, eh by the time they come about with that I think I'd be well equiped to handle someone trying to pull that on me. They probably couldn't afford to go after me anyway with gas being over four dollars a gallon and rising.
I just had a image of someone demanding a ransom and the person on the other end not caring and the kidnapper trying to negotiate.
Quote: Originally posted by Bradly_60 on Jun 27, 2008
That probably is smart.
But I don't think it was a smart idea to go with the annuity. You can easily beat the return on treasuries.
Brad
Also because this person is getting it as an annuity, they get to pay taxes to the state of Ohio for the life of the annuity! That was NOT a smart move at all!!!!
If it would have been taken as a lump sum payment paid to the blind trust the state of Ohio would only get it's state tax on the money only once! Nothing like supporting the state when you don't have too!!!! (If I was them) I'd fire the estate planner that talked them into that bad deal and then sue them for the bad advice!!!!
Quote: Originally posted by BaristaExpress on Jun 28, 2008
Also because this person is getting it as an annuity, they get to pay taxes to the state of Ohio for the life of the annuity! That was NOT a smart move at all!!!!
If it would have been taken as a lump sum payment paid to the blind trust the state of Ohio would only get it's state tax on the money only once! Nothing like supporting the state when you don't have too!!!! (If I was them) I'd fire the estate planner that talked them into that bad deal and then sue them for the bad advice!!!!
i"m confused...how do you pay more taxes when you have an annuity?? They will take the same amount of taxes out either way.
I'm sorry but I could live on 5 million a year after taxes, but that's just me; i'm not too greedy...
I have a question.and excuse me for being completely stupid on the subject seeing I've never won a jackpot (yet). lol..but what exactly is the benefits of taking an annuity? I guess I can look up on this ?, but I'm too damn lazy and someone here has to know... Do you get more of your winnings if you take the 26 years? Does that knock out the halfing it for lump sum choices? Taxing every year, and paying different as the taxes change, arn't you kinda scre#&(% yourself? Is it more of a greed thing?Want more, want more. BUT YES>>>>I DO UNDERSTAND the idea of maybe budgeting yourself and limiting yourself if your put on a like 5 million a year annuity plan. Dosen't always go picture perfect..I mean remember Bud Post? I'm totally not dissing the man at all, but there was trouble of spending more than he had that year, owing money, and waiting for that yearly $500 thousand to come in to repay people. Plus, you get those agressive companies who try and get you to sell future payouts for a lum sum. Watch out for those guys! I mean for me, half that baby up and tax it once..I'm positive I can live a full and well taken care of life on my lump sum. Again, I do understand that they choose this for whatever reason went better with their lifestyle, but I'm just wondering how it all works and what is the benefits of taking it yearly....
Quote: Originally posted by Lotto*Love on Jun 28, 2008
I have a question.and excuse me for being completely stupid on the subject seeing I've never won a jackpot (yet). lol..but what exactly is the benefits of taking an annuity? I guess I can look up on this ?, but I'm too damn lazy and someone here has to know... Do you get more of your winnings if you take the 26 years? Does that knock out the halfing it for lump sum choices? Taxing every year, and paying different as the taxes change, arn't you kinda scre#&(% yourself? Is it more of a greed thing?Want more, want more. BUT YES>>>>I DO UNDERSTAND the idea of maybe budgeting yourself and limiting yourself if your put on a like 5 million a year annuity plan. Dosen't always go picture perfect..I mean remember Bud Post? I'm totally not dissing the man at all, but there was trouble of spending more than he had that year, owing money, and waiting for that yearly $500 thousand to come in to repay people. Plus, you get those agressive companies who try and get you to sell future payouts for a lum sum. Watch out for those guys! I mean for me, half that baby up and tax it once..I'm positive I can live a full and well taken care of life on my lump sum. Again, I do understand that they choose this for whatever reason went better with their lifestyle, but I'm just wondering how it all works and what is the benefits of taking it yearly....
The next advertised Mega Millions jackpot is $43 million and the cash value is $25.9 million.
"This (the $25.9 million cash value) represents the sum of the first annuity installment, plus the current market value of government securities required to fund the remaining 25 installments, as of 6/27/2008 at 10:45am"
Simply put the advertised or estimated jackpot is the amount the winner will eventually get if they take the annuity jackpot and the cash value is the amount it costs to fund the annuity. For taxes it's pay it all now if you take the cash value or pay them from the amount you receive each year. At one time almost all lotto jackpots were paid as annuities and many were for 20 years. Lotteries began offering the cash value as the jackpot amounts grew larger.
There are pros and cons for taking either on any size jackpot and has been discussed many times on LP.
Quote: Originally posted by GamerMom on Jun 28, 2008
i"m confused...how do you pay more taxes when you have an annuity?? They will take the same amount of taxes out either way.
I'm sorry but I could live on 5 million a year after taxes, but that's just me; i'm not too greedy...
I don't understand people and what they don't know about taxes...... You pay what % on your income? lets say 35% the top bracket...OK Each yr your going to be paying 35% income tax on your annuity plus the state tax for the state of Ohio...... OK now you take it as a lump sum and pay 35% + the Ohio income tax the ONE TIME! Do you get it now? I hope so...... Now lets say you invest wisely.... now you get to pay a 15% capitol gains tax on the investments instead of being taxed at the 35% rate on your annuity payment every yr..... I myself would rather pay 15% capitol gains tax vs 35% income tax rate any day of the week..... How about you?
You can also go to the Jackpot Analysis page here in LP and see for yourself the difference and please check it out carefully to see the how much you can save in taxes over time... Please remember it's only an estimate but you can bet it's going to be pretty close for most people.
And yes you bet I'm greedy when it comes to how much I'm going to keep in my pocket! I'd rather have it than to be paying vast amounts in taxes to any State or Federal Government to squander on some stupid program or better yet to give away to some huge corporation in the form of corporate welfare!!!!!!!!!! I think I'm better suited to have the money to spend as I see fit, over any government entity ever could be!
Now remember you going to still owe another 10% on the original 1,653,846 to the IRS at the end of the year!
Now if you take what the IRS is going to get each year from your annuity check and multiply that by 26 your going to pay 10,750,012 in taxes on that annuity right off the top.... plus your still on the hook for another 10% and that's only if the government doesn't raise taxes in the mean time over those 26 years....... Now we still have yet to cover the state taxes that Ohio is owed for the next 26 years.... 113,288 x 26 = 2,945,488.
Now lets take a look at the LUMP SUM Totals. 26,000,000
Fed 25% 6,500,000
sub total 19,500,000
Ohio 1,560,000
Your Net 17,940,000
still another 10% owed to IRS at the end of the year on the total of 26,000,000 (2,600,000).
Math is so simple and it explains it all in the numbers and that's the cold hard facts of it all! You have got to love it........LOL
your net from the lump is 17,940,000. So it does to pay to wait. If you invest the (lump sum) money, you will be still paying taxes on the interest, no???
Quote: Originally posted by GamerMom on Jun 28, 2008
i"m confused...how do you pay more taxes when you have an annuity?? They will take the same amount of taxes out either way.
I'm sorry but I could live on 5 million a year after taxes, but that's just me; i'm not too greedy...
Ohio tax is 6% and that amount will be deducted from each of the 26 payments because that will always be Ohio income no matter where they live. Since the amount of the annuity is higher than the cash value, they will pay more in Ohio taxes on the annuity.
The article mentioned city tax and one city that did have an income tax wanted to collect taxes from a jackpot winner because the ticket was sold in their city even thought the winner didn't live there. The courts ruled the winnings or income came from the state and not the city where they bought the ticket so they didn't have to pay city taxes.
"I'm sorry but I could live on 5 million a year after taxes, but that's just me; i'm not too greedy..."
It was suggested by a LP member that the winner should be required to start a small business but I believe most players will say they want the choice of how they collect and spend their winnings. It's not about being greedy because they offer the cash value too; it's a personal choice.
Quote: Originally posted by sirbrad on Jun 28, 2008
Come forward you wuss. How do we know it was a legitimate win and not a lottery scam? Claiming it this way makes me determined to find out who it is, otherwise I would have forgotten the name by tomorrow. Claiming anonymously is not so great after all is it?
I know people are curious and yes seeing who won is part of the fun, but I don't think it does you any good to get your face and name out there for public consumption. It is not going to give you a dollar more, not everyone is interested in the fame or notoriety, and going from a few thousand dollars in the bank to over $100 million is a big adjustment that would be easier made without having to fend out beggars, sob stories, investment advice etc.
I also think that in addition to not wanting to be famous, some people don't want to be professional investors. They don't want to use the lump sum to attempt to make more than the annuity. When you have this much money, you don't need to invest to make any more, unless you find it fun to attempt to do so. So let the state invest for you in the annuity. Some people on here think unless you aim for making the most money and least taxes possible then you are foolish. But I don't think so. Let someone handle my taxes and then park it in a bank account I can easily get to, and let me have fun living life the way I want to where I want to.
Quote: Originally posted by GamerMom on Jun 28, 2008
Your net 1,127,096 for now until tax time...lol
but if you multiply that x 26=$29,304,496
your net from the lump is 17,940,000. So it does to pay to wait. If you invest the (lump sum) money, you will be still paying taxes on the interest, no???
OMG, you have to be kidding... right? I guess it does take all kinds..... Capitol Gains Tax is just that... it's a tax on any gains you made on any investment! And it's better to be paying a 15% capitol gains tax vs a 35% income tax! Capitol gains tax is the tax you pay on the return you earn on your investment (like interest or gained value on a stock...etc).
But like I said before.... go ahead and wait and who knows what your tax rate will be 5,6, 10 years down the road into collecting those annuity checks.... Most likely taxes will be higher (they rarely go down) and the dollar will be even weaker against other currency than it is today... so go ahead and wait for the long drawn out payday...
Quote: Originally posted by BaristaExpress on Jun 28, 2008
I don't understand people and what they don't know about taxes...... You pay what % on your income? lets say 35% the top bracket...OK Each yr your going to be paying 35% income tax on your annuity plus the state tax for the state of Ohio...... OK now you take it as a lump sum and pay 35% + the Ohio income tax the ONE TIME! Do you get it now? I hope so...... Now lets say you invest wisely.... now you get to pay a 15% capitol gains tax on the investments instead of being taxed at the 35% rate on your annuity payment every yr..... I myself would rather pay 15% capitol gains tax vs 35% income tax rate any day of the week..... How about you?
You can also go to the Jackpot Analysis page here in LP and see for yourself the difference and please check it out carefully to see the how much you can save in taxes over time... Please remember it's only an estimate but you can bet it's going to be pretty close for most people.
And yes you bet I'm greedy when it comes to how much I'm going to keep in my pocket! I'd rather have it than to be paying vast amounts in taxes to any State or Federal Government to squander on some stupid program or better yet to give away to some huge corporation in the form of corporate welfare!!!!!!!!!! I think I'm better suited to have the money to spend as I see fit, over any government entity ever could be!
It sounds like you're one of the people who doesn't understand the tax implications.
The income comes from the state of Ohio, and Ohio gets to collect income tax on every dime of it (other than whatever exemptions you get). You can take it all now and pay all of the taxes now, or you can collect some each year and pay some of the total tax each year. Either way, the state gets to collect tax on all of it, but they only collect that tax once. Regardless of whether you take the lump sum or the annuity the income you earn from sources other than the lottery prize will be taxed based on your residence and the type of income.
If you take the lump sum you'll have one year's worth of deductions. The first 350k (give or take, assuming married filing jointly) will be taxed at somewhat lower rates, and the rest will all be taxed at the highest rate. If you take annuity payments, you'll have deductions every year, and every year you'll be taxed at somewhat lower rates on the first 350k. For PB's 30 year payout that's as much as 10.5 million that will be taxed at lower rates. Sure, it's possible that tax rates will go up, but they may also go down. If you'd won a jackpot and taken a lump sum in 1980 you'd have paid 70% federal tax on the vast majority of it, and you'd probably have felt pretty stupid when rates dropped to "only" 50% just 2 years later.
Another advantage of the annuity is that you'll have more money invested on your behalf. By taking the annuity all of the money that isn't yet paid as taxes will be invested and earning interest. If the cash value is $10 million the lottery will invest the entire $10 million, while Joe Taxpayer can only invest $6.5 million (after federal taxes, and assuming there is no loss to state taxes). To earn the same income with your post-tax investment you'd need a rate that is about 50% higher than the rates the lottery gets. Sure, you can go for capital gains, but you won't be a typical investor with a modest portfolio. Your income after a lottery win will almost certainly mean you'll be paying the alternative minimum tax rate of 28% on most of your income.
Quote: Originally posted by GamerMom on Jun 28, 2008
Your net 1,127,096 for now until tax time...lol
but if you multiply that x 26=$29,304,496
your net from the lump is 17,940,000. So it does to pay to wait. If you invest the (lump sum) money, you will be still paying taxes on the interest, no???
The top bracket for federal taxes is currently 35%. Add 6% for Ohio, and that's a total of 41%. Annual deductions and paying lower rates on some of the income will favor the annuity, but let's keep it simple and assume that's the rate for every dime of the income. That leaves 59% after taxes. On the $26 million lump sum you'd have $15.34 million now. With the annuity you'd collect $25.37 million. That sound slike 65% more money, but it would take 25 years to get it all. Having to wait to collect the full annuity value means that it isn't really 65% more than the lump sum.
What the real difference is depends on what happens in the future. Nobody has a crystal ball that will tell them for sure what wil happen, so all you can do is get the best information available and take your chances. Increasing tax and interest rates make the lump sum more appealing, while lower tax and interest rates favor the annuity. The best thing you can do is get informed opinions from people who reallyunderstand the relevant issues, make your best guess about the future, and consider your own personal goals, plans and temperment. Almost everybody takes the cash value, but there's nothing intrinsically wrong with the annuity. For some people it's definitely the better choice. The only thing I would say should be written in stone is that people who take the annuity because they have concerns about their ability to control their spending should never change their mind and sell the annuity. Winning the lottery means your budget is a lot bigger, but you still have to live within that budget.
Smart to keep his name and face out of the front page.
Smart on taking it over the years?...depends.
Although he/she would make more money over a 25 year period by taking the lump sum and investing wisely, there are other things to consider...
one thing for example.
for someone who isn't comfortable with investing, a smaller steady income would allow for many finacial mistakes over the years without damaging ones net worth. (sometimes its better to leave some of your toys safely in the toybox...otherwise between sqaubling siblings and the family dog you may end up with all your toys completely destroyed)
remember handling 196 million is a huge responsibility. he/she could end up like that dork in West Va. who won 365 million, and 6 years later was finacially busted.
a friend of mine once said, "money is like dope". you do a little at a time your fine. build up a tolerance,
do to much, to soon and you OD!
you don't learn to handle large amounts of money overnight, it takes time, hard work, and education.
I've worked hard enough in my life, and time is something I would not want to waste anywhere but on a secluded beach sipping a cool drink.
7 plus million a year, I don't need any more than that...that would be more money than I would know what to do with!
I think the person got very sound advice. The way the markets are today, you may invest heavily and lose heavily. Also, the total economic picture is changing. In 20 years, gas may be 100 dollars per gallon and a loaf of bread may be $50.00. That person wanted to ensure that they and their loved ones would survive. The way I look at taxes is like this: if you aren't paying any, you aren't making any money. It doesn't matter who you pay, Uncle Sam or State or both..also, that person will get to deduct their state taxes from their federal every year so all is not lost.
Claiming the jackpot anonymously was also very smart. Trust me..people and businesses will hound you to death. I had won 25 grand once and you wouldn't believe the people (most of whom I didn't even know) asking for favors and money like I was rich or something.
Claiming the jackpot anonymously was also very smart. and The way the markets are today, you may invest heavily and lose heavily. Also, the total economic picture is changing.
Eh, that's why I'd move as much as I could out of our dollar. Besides that, the commodities bubble is probably going to be around for good while longer and there's still probably a good investment there. We wouldn't be in the mess we're getting into if government did it's job 30 years ago and got its nose out of the private sector and other places where it didn't below ago and people didn't drag their feet. But alas, politicans are cheap to buy, especially in bulk.
Quote: Originally posted by GamerMom on Jun 28, 2008
Your net 1,127,096 for now until tax time...lol
but if you multiply that x 26=$29,304,496
your net from the lump is 17,940,000. So it does to pay to wait. If you invest the (lump sum) money, you will be still paying taxes on the interest, no???
One thing you have to consider with the annuity is that what $1,127,096 is worth now, will not be the same in the future with inflation and the valuation of the dollar. Better to take it now so you can grow it for the future. Even if you just put it into t-bills, it will grow.
For example - The year I was born, my Father made $3,800 annual salary at his first full time job out of college. Eighteen years later, I made $3,800 working parttime at K-Mart. These days nearly 30 years later, I make more than that each month.
Another thing to consider with annuities is that everyone assumes you won $43m and you have that in your bank account right now.
I'll take the cash thankyouverymuch, and take my chances.
Quote: Originally posted by time*treat on Jun 30, 2008
Didn't quite come forward...
Didn't take the cash option...
Only one strike left...
Had you considered this may not have been the first lottery jackpot this person won and maybe he decided to handle it differently this time. After all, he didn't show the excitement normally shown by a first time winner and he seems to have had a plan in place to collect it without giving out his personal information.
I dunno about that, Ohio people seem to have gotten wisened up in claiming anonymously. I think the three winners in a row 12M, 267M/270M and 265M showed that when each of them claimed as a trust.
Congratulations to the lucky winner!!
Very intelligent person to claim the winnings in a blind trust.Must be a fairly young person,too,seeing as they chose the annuity.I think that all lotterys should allow the winners to claim prizes without giving the names to the press.
That probably is smart.
But I don't think it was a smart idea to go with the annuity. You can easily beat the return on treasuries.
Brad
Yeah, 7.5 mil./yr. is hardly enough to buy a bag of rice and a can of corn these days. Aaaaaaaaagh!!!!! Why was it not ME!?!?!? When am I gonna win???????? Booooooooohoooooooo I never win!!!!!!!!
I always groan when it's in Ohio, the only time it was any fun was when the "Battle" situation occurred. I get kind of bored with these BlinD TrusT things. Might as well have said, the last jackpot was 196M, the next one will be 12M, not even bother to say anyone won... then it would be even more secret! Don't even say what State they were in or the store that sold it.. you wouldn't want mobs of people flocking to the Store thinking they might be next!
Wow! Thats a long wait! I guess they choose what would be best for them. I can see the anonymous thing, but man,there goes my story reading.lol Hope they have a blast!!!! I would totally be booking a flight somewhere tropical right now!
Congrats to them! I'm sure they made the best decision that fit their needs and lifestyle. Afterall, they are the ones who won.
Figured that winner was going to claim anonymously but then they chose the annuity over the lump sum and good for them for doing it but I wonder why it took so long, maybe they did move in that time? But young or not, IMO it wasn't very wise taking annuity since now they're going to be paying taxes on it for the next 26 years and now the town wants a piece of it too. Even 1% is going to result a nice chunk of change for an area they probably won't even be living in anymore, not to mention having to continue to pay state taxes as well as federal taxes that'll certainly go up during that time. At least with the lump sum you get it all out of the way at once and can safely invest it in something low risk and pay less (at least now) on whatever dividends you may get. In 26 years they certainly could turn the 70 or so million they would have after taking the cash and paying taxes into a much higher amount than what the annuitized jackpot was. Then again, maybe they're a financial idiot who would have gone broke if they did take it all at once. Oh well, don't matter hope they enjoy the next 26 years and don't screw it up.
Ohio gets to collect income tax on all of it, whether they take it as a lump sum or annuity. It's just a question of whether they collect it all now or a bit each year. The village can enact any kind of tax they want. The income doesn't come from the village, so if the winner doesn't live there in the future they won't have to pay the tax.
D'oh! Yeah, you're right, I wrote that after just waking up and wasn't fully awake yet, it should have read more along the lines of how the the area would be trying to cash in on it if that person stayed in the area, which then they would have to pay it.. As for the state taxes, of course in 26 years time they would pay less each year but the state could raise the tax and then they'd have to pay more, same with the federal, I doubt either will be lowering any time soon and wouldn't be surprised to see the Federal Income Tax go up within the next two or three years. I still think they might have been better off taking the lump sum though.
Come forward you wuss. How do we know it was a legitimate win and not a lottery scam? Claiming it this way makes me determined to find out who it is, otherwise I would have forgotten the name by tomorrow. Claiming anonymously is not so great after all is it?
Good for this person.
I hope they stay smart and the money lasts for generations.
I don't agree though on the annuity. I'm with DC. It would have to be somewhere in the $300m range before I would consider the annuity, regardless of age. Then again, it may be right for this person.
thats magnificants hope 2 join u as a winner soon.
Congrats to the winners.
I dont think they waited too long. We would waited even longer to collect.
Anyone who remembers the younger couple (at least she was. . .maybe like 27) who won the $20M jackpot in the Canandian Lottery will also remember the story that appeared a few months after their win about some guy who hatched a plan to kidnap the family to extort their money and then kill them all so as not to be identified. . .or maybe we could remember Bud Post's brother who was attempting to hire a hit man to revenge what the brother thought was not enough of a gift. . .or the thousands of reguests that well publicized Jackpot winners are deluged with. . .or Jack Whitaker's famous (infamous) hijinks, lawsuits, and tragedies that a huge Jackpot brought to him.
I could well imagine why many lottery winners wish to remain anonymous. . .so they don't end up as a cautionary tale on some new 'Curse of the Lottery Winners' show on 'E' or 'A&E' or some other cable show looking for fodder during a slow holiday weekend. And who can (if they were members) forget the heated discussion about 'Bunky and the Lottery Win' about a year ago--lots of people here mocking him (although most, if I remember correctly, defended him)
Some people can handle the intense scrutiny that a Jackpot win brings them and others cannot--I'm no LotteryWinner but I already had a mooch threaten to hurt my parents if I didn't give him 100K of their money just before a con man got hold of them and had them liquidate 75% of their estate and give it to him to "invest". The guy that threatened AND the conman are BOTH in prison, but my parents' retirement money was never retrieved. . .I've learned that if you have $1 more than the next guy then that guy will ask you for some of it and then threaten if you still say no.
If I EVER won--I would make most members of my family and my SO's family minor partners and let them know that was IT. . .move my parents. . .one time gift our friends and then just travel til the brouhaha died down. Then I would return to my home state and set up educational projects in the schools and prisons in my community so as to provide gainful employment to those who are chronically unemployed in the only area of growth in the next five years--development of green energy sources. I believe that gainful employment would have prevented the guy from threatening my parents. . .as for the conman. . .well I later found out that he had dome the same thing to his parents, his parents' friends, his brother (who had given him a job in brother's company), his brother's friends and other people like my parents who were essentially strangers. . . so prison is the only place for that guy where he cannot hurt any other family.
Just a thought
I just had a image of someone demanding a ransom and the person on the other end not caring and the kidnapper trying to negotiate.
If it would have been taken as a lump sum payment paid to the blind trust the state of Ohio would only get it's state tax on the money only once! Nothing like supporting the state when you don't have too!!!! (If I was them) I'd fire the estate planner that talked them into that bad deal and then sue them for the bad advice!!!!
i"m confused...how do you pay more taxes when you have an annuity?? They will take the same amount of taxes out either way.
I'm sorry but I could live on 5 million a year after taxes, but that's just me; i'm not too greedy...
I have a question.and excuse me for being completely stupid on the subject seeing I've never won a jackpot (yet). lol..but what exactly is the benefits of taking an annuity? I guess I can look up on this ?, but I'm too damn lazy and someone here has to know... Do you get more of your winnings if you take the 26 years? Does that knock out the halfing it for lump sum choices? Taxing every year, and paying different as the taxes change, arn't you kinda scre#&(% yourself? Is it more of a greed thing?Want more, want more. BUT YES>>>>I DO UNDERSTAND the idea of maybe budgeting yourself and limiting yourself if your put on a like 5 million a year annuity plan. Dosen't always go picture perfect..I mean remember Bud Post? I'm totally not dissing the man at all, but there was trouble of spending more than he had that year, owing money, and waiting for that yearly $500 thousand to come in to repay people. Plus, you get those agressive companies who try and get you to sell future payouts for a lum sum. Watch out for those guys! I mean for me, half that baby up and tax it once..I'm positive I can live a full and well taken care of life on my lump sum. Again, I do understand that they choose this for whatever reason went better with their lifestyle, but I'm just wondering how it all works and what is the benefits of taking it yearly....
The next advertised Mega Millions jackpot is $43 million and the cash value is $25.9 million.
"This (the $25.9 million cash value) represents the sum of the first annuity installment, plus the current market value of government securities required to fund the remaining 25 installments, as of 6/27/2008 at 10:45am"
Simply put the advertised or estimated jackpot is the amount the winner will eventually get if they take the annuity jackpot and the cash value is the amount it costs to fund the annuity. For taxes it's pay it all now if you take the cash value or pay them from the amount you receive each year. At one time almost all lotto jackpots were paid as annuities and many were for 20 years. Lotteries began offering the cash value as the jackpot amounts grew larger.
There are pros and cons for taking either on any size jackpot and has been discussed many times on LP.
I don't understand people and what they don't know about taxes...... You pay what % on your income? lets say 35% the top bracket...OK Each yr your going to be paying 35% income tax on your annuity plus the state tax for the state of Ohio...... OK now you take it as a lump sum and pay 35% + the Ohio income tax the ONE TIME! Do you get it now? I hope so...... Now lets say you invest wisely.... now you get to pay a 15% capitol gains tax on the investments instead of being taxed at the 35% rate on your annuity payment every yr..... I myself would rather pay 15% capitol gains tax vs 35% income tax rate any day of the week..... How about you?
You can also go to the Jackpot Analysis page here in LP and see for yourself the difference and please check it out carefully to see the how much you can save in taxes over time... Please remember it's only an estimate but you can bet it's going to be pretty close for most people.
And yes you bet I'm greedy when it comes to how much I'm going to keep in my pocket! I'd rather have it than to be paying vast amounts in taxes to any State or Federal Government to squander on some stupid program or better yet to give away to some huge corporation in the form of corporate welfare!!!!!!!!!! I think I'm better suited to have the money to spend as I see fit, over any government entity ever could be!
Annuity 43,000,000
26 payments 1,653,846
Fed 25% tax 413,462
sub total 1,240,384
Ohio state tax 113,288
Your net 1,127,096 for now until tax time...lol
Now remember you going to still owe another 10% on the original 1,653,846 to the IRS at the end of the year!
Now if you take what the IRS is going to get each year from your annuity check and multiply that by 26 your going to pay 10,750,012 in taxes on that annuity right off the top.... plus your still on the hook for another 10% and that's only if the government doesn't raise taxes in the mean time over those 26 years....... Now we still have yet to cover the state taxes that Ohio is owed for the next 26 years.... 113,288 x 26 = 2,945,488.
Now lets take a look at the LUMP SUM Totals. 26,000,000
Fed 25% 6,500,000
sub total 19,500,000
Ohio 1,560,000
Your Net 17,940,000
still another 10% owed to IRS at the end of the year on the total of 26,000,000 (2,600,000).
Math is so simple and it explains it all in the numbers and that's the cold hard facts of it all! You have got to love it........LOL
Your net 1,127,096 for now until tax time...lol
but if you multiply that x 26=$29,304,496
your net from the lump is 17,940,000. So it does to pay to wait. If you invest the (lump sum) money, you will be still paying taxes on the interest, no???
Ohio tax is 6% and that amount will be deducted from each of the 26 payments because that will always be Ohio income no matter where they live. Since the amount of the annuity is higher than the cash value, they will pay more in Ohio taxes on the annuity.
The article mentioned city tax and one city that did have an income tax wanted to collect taxes from a jackpot winner because the ticket was sold in their city even thought the winner didn't live there. The courts ruled the winnings or income came from the state and not the city where they bought the ticket so they didn't have to pay city taxes.
"I'm sorry but I could live on 5 million a year after taxes, but that's just me; i'm not too greedy..."
It was suggested by a LP member that the winner should be required to start a small business but I believe most players will say they want the choice of how they collect and spend their winnings. It's not about being greedy because they offer the cash value too; it's a personal choice.
I know people are curious and yes seeing who won is part of the fun, but I don't think it does you any good to get your face and name out there for public consumption. It is not going to give you a dollar more, not everyone is interested in the fame or notoriety, and going from a few thousand dollars in the bank to over $100 million is a big adjustment that would be easier made without having to fend out beggars, sob stories, investment advice etc.
I also think that in addition to not wanting to be famous, some people don't want to be professional investors. They don't want to use the lump sum to attempt to make more than the annuity. When you have this much money, you don't need to invest to make any more, unless you find it fun to attempt to do so. So let the state invest for you in the annuity. Some people on here think unless you aim for making the most money and least taxes possible then you are foolish. But I don't think so. Let someone handle my taxes and then park it in a bank account I can easily get to, and let me have fun living life the way I want to where I want to.
OMG, you have to be kidding... right? I guess it does take all kinds..... Capitol Gains Tax is just that... it's a tax on any gains you made on any investment! And it's better to be paying a 15% capitol gains tax vs a 35% income tax! Capitol gains tax is the tax you pay on the return you earn on your investment (like interest or gained value on a stock...etc).
But like I said before.... go ahead and wait and who knows what your tax rate will be 5,6, 10 years down the road into collecting those annuity checks.... Most likely taxes will be higher (they rarely go down) and the dollar will be even weaker against other currency than it is today... so go ahead and wait for the long drawn out payday...
It sounds like you're one of the people who doesn't understand the tax implications.
The income comes from the state of Ohio, and Ohio gets to collect income tax on every dime of it (other than whatever exemptions you get). You can take it all now and pay all of the taxes now, or you can collect some each year and pay some of the total tax each year. Either way, the state gets to collect tax on all of it, but they only collect that tax once. Regardless of whether you take the lump sum or the annuity the income you earn from sources other than the lottery prize will be taxed based on your residence and the type of income.
If you take the lump sum you'll have one year's worth of deductions. The first 350k (give or take, assuming married filing jointly) will be taxed at somewhat lower rates, and the rest will all be taxed at the highest rate. If you take annuity payments, you'll have deductions every year, and every year you'll be taxed at somewhat lower rates on the first 350k. For PB's 30 year payout that's as much as 10.5 million that will be taxed at lower rates. Sure, it's possible that tax rates will go up, but they may also go down. If you'd won a jackpot and taken a lump sum in 1980 you'd have paid 70% federal tax on the vast majority of it, and you'd probably have felt pretty stupid when rates dropped to "only" 50% just 2 years later.
Another advantage of the annuity is that you'll have more money invested on your behalf. By taking the annuity all of the money that isn't yet paid as taxes will be invested and earning interest. If the cash value is $10 million the lottery will invest the entire $10 million, while Joe Taxpayer can only invest $6.5 million (after federal taxes, and assuming there is no loss to state taxes). To earn the same income with your post-tax investment you'd need a rate that is about 50% higher than the rates the lottery gets. Sure, you can go for capital gains, but you won't be a typical investor with a modest portfolio. Your income after a lottery win will almost certainly mean you'll be paying the alternative minimum tax rate of 28% on most of your income.
The top bracket for federal taxes is currently 35%. Add 6% for Ohio, and that's a total of 41%. Annual deductions and paying lower rates on some of the income will favor the annuity, but let's keep it simple and assume that's the rate for every dime of the income. That leaves 59% after taxes. On the $26 million lump sum you'd have $15.34 million now. With the annuity you'd collect $25.37 million. That sound slike 65% more money, but it would take 25 years to get it all. Having to wait to collect the full annuity value means that it isn't really 65% more than the lump sum.
What the real difference is depends on what happens in the future. Nobody has a crystal ball that will tell them for sure what wil happen, so all you can do is get the best information available and take your chances. Increasing tax and interest rates make the lump sum more appealing, while lower tax and interest rates favor the annuity. The best thing you can do is get informed opinions from people who reallyunderstand the relevant issues, make your best guess about the future, and consider your own personal goals, plans and temperment. Almost everybody takes the cash value, but there's nothing intrinsically wrong with the annuity. For some people it's definitely the better choice. The only thing I would say should be written in stone is that people who take the annuity because they have concerns about their ability to control their spending should never change their mind and sell the annuity. Winning the lottery means your budget is a lot bigger, but you still have to live within that budget.
Smart to keep his name and face out of the front page.
Smart on taking it over the years?...depends.
Although he/she would make more money over a 25 year period by taking the lump sum and investing wisely, there are other things to consider...
one thing for example.
for someone who isn't comfortable with investing, a smaller steady income would allow for many finacial mistakes over the years without damaging ones net worth. (sometimes its better to leave some of your toys safely in the toybox...otherwise between sqaubling siblings and the family dog you may end up with all your toys completely destroyed)
remember handling 196 million is a huge responsibility. he/she could end up like that dork in West Va. who won 365 million, and 6 years later was finacially busted.
a friend of mine once said, "money is like dope". you do a little at a time your fine. build up a tolerance,
do to much, to soon and you OD!
you don't learn to handle large amounts of money overnight, it takes time, hard work, and education.
I've worked hard enough in my life, and time is something I would not want to waste anywhere but on a secluded beach sipping a cool drink.
7 plus million a year, I don't need any more than that...that would be more money than I would know what to do with!
But I would live to give it a try!!
*just another point of view*
I think the person got very sound advice. The way the markets are today, you may invest heavily and lose heavily. Also, the total economic picture is changing. In 20 years, gas may be 100 dollars per gallon and a loaf of bread may be $50.00. That person wanted to ensure that they and their loved ones would survive. The way I look at taxes is like this: if you aren't paying any, you aren't making any money. It doesn't matter who you pay, Uncle Sam or State or both..also, that person will get to deduct their state taxes from their federal every year so all is not lost.
Claiming the jackpot anonymously was also very smart. Trust me..people and businesses will hound you to death. I had won 25 grand once and you wouldn't believe the people (most of whom I didn't even know) asking for favors and money like I was rich or something.
Eh, that's why I'd move as much as I could out of our dollar. Besides that, the commodities bubble is probably going to be around for good while longer and there's still probably a good investment there. We wouldn't be in the mess we're getting into if government did it's job 30 years ago and got its nose out of the private sector and other places where it didn't below ago and people didn't drag their feet. But alas, politicans are cheap to buy, especially in bulk.
More and more lottery winners should seek anonymity, and eventually it will be seen as the norm, as it is in the UK and Australia.
I wish the winner well.
Good on him/her!
One thing you have to consider with the annuity is that what $1,127,096 is worth now, will not be the same in the future with inflation and the valuation of the dollar. Better to take it now so you can grow it for the future. Even if you just put it into t-bills, it will grow.
For example - The year I was born, my Father made $3,800 annual salary at his first full time job out of college. Eighteen years later, I made $3,800 working parttime at K-Mart. These days nearly 30 years later, I make more than that each month.
Another thing to consider with annuities is that everyone assumes you won $43m and you have that in your bank account right now.
I'll take the cash thankyouverymuch, and take my chances.
Didn't quite come forward...
Didn't take the cash option...
Only one strike left...
Had you considered this may not have been the first lottery jackpot this person won and maybe he decided to handle it differently this time. After all, he didn't show the excitement normally shown by a first time winner and he seems to have had a plan in place to collect it without giving out his personal information.
I dunno about that, Ohio people seem to have gotten wisened up in claiming anonymously. I think the three winners in a row 12M, 267M/270M and 265M showed that when each of them claimed as a trust.