|Posted: May 10, 2012, 9:52 pm - IP Logged|
I am confused by these statements:
"A lump-sum winning will typically get reduced by 45% or more for the time value of money (acceleration by 2o+ years)"
ok, so say jackpot is $100, lump sum is 60% of it, so it's $60m, correct? Fine so far.
"and then the net amount is further reduced by approximately 35% or more for taxes � leaving a net amount of 35% or less of the gross winnings."
ok, so the taxes are taken off the $60m not the jp amount of $100m, right? Leaving $40m in the bank. thus, you take home %40 of jackpot prize.
"Installment collections will only generally only be subjected to the federal tax hit (depending on state rules) and the taxes are paid over the collection period. "
huh? So if I choose 26 installments then do I get the entire jackpot of $100m or not? Do I still pay %35 tax on the entire $100m, or the yearly installments?