ATLANTA, Ga. — A Savannah, Georgia, dad can expect more than a tie for Father's Day after giving his daughter a winning lottery ticket worth $400,000.
Aisha Prater, 32, was shocked when her father handed her the winning ticket Friday.
"He gave me a call and said to come home as soon as possible," said Prater, also a Savannah resident. "It was a surprise."
The top prize in the "20X The Money" scratch-off game was purchased at Country Convenience #1, 12403 White Bluff Road, Savannah.
According to Prater, who has a 4-year-old daughter, the windfall couldn't have come at a better time.
"I'm furloughed," she explained. "He gave it to me to give me a fresh start."
Prater will use the prize to pay off bills. She plans to treat her father to "a big something ... a very big something" for Father's Day.
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mum shoulda been the word on this father's gift. It will be interesting to see if the IRS man considers this a gift...
The ticket had no value till redemed. Can't imagne it would be a problem.
Great story, great man. That probably made him feel better than anything else he could have done with that money.
God bless him.
What a considerate loving father. I applaud his generosity.
God bless him for his unselfishness.
WOW,Awesome Dad , Congrats to the whole family, they don't just have a winning lottery ticket, they have Love. Can't beat that.
What a generous and loving thing for a father to do for his daughter. God bless their family.
dad prob has $200k in medical expenses owing, hehehe
Great story and what a great Dad. He can adopt me anytime!
The story didn't mention if her daughter's father was still around. I wonder if he's a great Dad too?
Very touching story, I wonder if my father will do the same as Aisha's Father.
That's what I was thinking when I saw the headline. If he had given it to her before it won, it was only worth a dollar and no problem. But it was still his when it became worth $400K, so I think he owes taxes on it. Then when he gives the rest to her she owes on that amount. I hope I'm wrong.
The person who has to pay taxes on it will receive a W-G form from the state and they only send those out to the person claiming the money.
I hope she gives him some of the cash!
That was a great gift right there.
The ticket very definitely has a value before it's redeemed, and in theory it could cost the father between 110k and 140k, depending on his other income and his filing status. Assuming the father scratched it and knew it was a winner before giving it to the daughter he had constructive receipt of the 400k under IRS rules, so his taxable income for 2011 increases by 400k. Applying the rules strictly, he owes over 100k in taxes, even though he gave the ticket away.
Since the IRS doesn't seem to be as strict about the rules when families share lottery prizes they may be happy enough if the daughter claims the prize as her own taxable income. The article says nothing about the father's finances or the tax implications, but it probably won't make a big difference in how much tax they collect.
KY Floyd
So if the father got drunk and ripped up the winning ticket on camera(youtube) and said to himself " the hell with it-no one is going to claim this winning prize" ---are you saying he would still owe taxes on that winning ticket?
He didn't tear up the ticket so that nobody collected. He gave it to somebody who did collect. I trust you see a clear difference between the two. The ticket was worth 400k and he was entitled to that income. He was free to give it away, but nobody had the right to take it from him. It's being entitled to the money without "substantial limitations" that constitutes constructive receipt. Simply put, it's yours now if you want to pick it up. You probably already understand constructive receipt as it applies to a paycheck you get on 12/30 and cash in January. Your employer paid you by check in December, so it's part of your income for that year even when you wait until January to cash it. It doesn't matter whether he gave the daughter the ticket or collected the cash and gave that to her.
As for actually tearing up a winning ticket, it raises an interesting question. According to the letter of the law, once you have constructive receipt you've also got the tax obligation, whether you choose to cash it in or not. If you accidentally destroyed it you should have taxable income, but you'd also have a casualty loss that's deductible, so most of the income would be offset. There's no deduction allowed for deliberately destroying your property, so according to the letter of the law the income was available to you, so you had constructive receipt.
Wikipedia has a good basic article on it: http://en.wikipedia.org/wiki/Constructive_receipt
It recounts four cases in which the IRS claimed income tax was due in one year and a taxpayer claimed it wasn't due until the following year. Courts agreed with taxpayers in all four cases, but only because the taxpayers didn't have access to the money without "substantial limitations" beyond their control. Deliberately destroying a ticket you're entitled to cash in certainly doesn't mean there was a limitation beyond your control preventing you from taking actual receipt of the income. There's always a chance a court would rule that having destroyed the ticket there would then be a substantial limitation, but I don't know if that theory has ever been tested. At the least, I'm sure you'd have to try to collect without the ticket in order to establish that there was a limitation.