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Will Gift Tax Apply if Someone Else Claims a Ticket?

Topic closed. 31 replies. Last post 4 years ago by Stack47.

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savagegoose's avatar - ProfilePho
adelaide sa
Australia
Member #37136
April 11, 2006
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Posted: May 8, 2013, 6:34 pm - IP Logged

i have seen families win, and then organize  a claim with everyone  they want to  share  as part of the claiming ticket. this was organised by thir    advisors. to avoid gift taxes. I cant see seperate tickets being  any easier for the tax office to  make a claim against than that setup. sure they had lawyers help.

just write good luck and their name on the back of the ticket.  let the taxman try and prove anything.

2014 = -1016; 2015= -1409; 2016 JAN = -106; FEB= -81; MAR= -131; APR= - 87: MAY= -91; JUN= -39; JUL=-134; AUG= -124; SEP = -123; OCT= -84  NOV=- 73 TOT= -3498

keno historic = -2291 ; 2015= -603; 2016= JAN=-32, FEB= +12 , MAR= -86, APR = -77. MAY= -48, JUN= -29, JUL=-71; AUG = -52; SEPT= -43; OCT = +56 NOV = -33 TOT= -3297

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    Kentucky
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    Posted: May 8, 2013, 8:41 pm - IP Logged

    The problem is, I'm not actually buying the tickets for them.  They are just a secondary part of my game & my system that I'm playing.  I'm basically just willing to give them the lesser valued second prize wins should I win the biggie.  If I were actually buying them, like for a gift, and giving them away before they won, I would be far less concerned about how this all plays out.

    "The problem is, I'm not actually buying the tickets for them."

    If you're planning on giving them the secondary prize winning tickets if you win the jackpot, you are buying those tickets for them based on that condition. It might be as simple as them paying you the cost of the ticket.

    What is considered a gift?
    Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.

    http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Gift-Taxes#2

      PlayToWin47's avatar - Lottery-041.jpg
      Joplin MO
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      Posted: May 9, 2013, 9:48 am - IP Logged

      "The problem is, I'm not actually buying the tickets for them."

      If you're planning on giving them the secondary prize winning tickets if you win the jackpot, you are buying those tickets for them based on that condition. It might be as simple as them paying you the cost of the ticket.

      What is considered a gift?
      Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.

      http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Gift-Taxes#2

      Hmm ... interesting!

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        NY
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        Posted: May 9, 2013, 2:07 pm - IP Logged

        "The problem is, I'm not actually buying the tickets for them."

        If you're planning on giving them the secondary prize winning tickets if you win the jackpot, you are buying those tickets for them based on that condition. It might be as simple as them paying you the cost of the ticket.

        What is considered a gift?
        Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.

        http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Gift-Taxes#2

        "you are buying those tickets for them based on that condition."

        It's really very simple. He's not buying tickets for them. He freely admits it, and it's the only factual conclusion based on his plans. He's making plans to give large gifts if he has the chance to do so. He doesn't even know which tickets he will be giving as gifts until the drawing is held and he learns what each ticket is worth. The value of the gift will be the value of the tickets at the time the gift is made. Paying for the cost of the ticket is irrelevant, since that isn't full consideration.

        Whether or not the IRS will be able to establish what was done is a separate matter.

          rdgrnr's avatar - walt
          Way back up in them dadgum hills, son!
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          Posted: May 9, 2013, 2:31 pm - IP Logged

          "you are buying those tickets for them based on that condition."

          It's really very simple. He's not buying tickets for them. He freely admits it, and it's the only factual conclusion based on his plans. He's making plans to give large gifts if he has the chance to do so. He doesn't even know which tickets he will be giving as gifts until the drawing is held and he learns what each ticket is worth. The value of the gift will be the value of the tickets at the time the gift is made. Paying for the cost of the ticket is irrelevant, since that isn't full consideration.

          Whether or not the IRS will be able to establish what was done is a separate matter.

          Welcome back, Jelly Man!

          Glad to see you finally come out of hiding!

          And don't worry, that post of mine you were avoiding is well buried by now.

          Just like always, just as planned.

            PlayToWin47's avatar - Lottery-041.jpg
            Joplin MO
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            Posted: May 9, 2013, 2:48 pm - IP Logged

            "you are buying those tickets for them based on that condition."

            It's really very simple. He's not buying tickets for them. He freely admits it, and it's the only factual conclusion based on his plans. He's making plans to give large gifts if he has the chance to do so. He doesn't even know which tickets he will be giving as gifts until the drawing is held and he learns what each ticket is worth. The value of the gift will be the value of the tickets at the time the gift is made. Paying for the cost of the ticket is irrelevant, since that isn't full consideration.

            Whether or not the IRS will be able to establish what was done is a separate matter.

            Yup ... Correct.

             

            "He doesn't even know which tickets he will be giving as gifts until the drawing is held and he learns what each ticket is worth"

            Exactly!


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              Posted: May 9, 2013, 4:47 pm - IP Logged

              I don't think gift tax will be a problem because when your family members claim the prize they will be responsible for paying the taxes on the prize as regular income. The government will get their share.

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                Kentucky
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                Posted: May 9, 2013, 5:26 pm - IP Logged

                "you are buying those tickets for them based on that condition."

                It's really very simple. He's not buying tickets for them. He freely admits it, and it's the only factual conclusion based on his plans. He's making plans to give large gifts if he has the chance to do so. He doesn't even know which tickets he will be giving as gifts until the drawing is held and he learns what each ticket is worth. The value of the gift will be the value of the tickets at the time the gift is made. Paying for the cost of the ticket is irrelevant, since that isn't full consideration.

                Whether or not the IRS will be able to establish what was done is a separate matter.

                This isn't a discussion about scratch-off players who you believe should claim their Free Ticket as gambling winnings on their 1040 or be imprisoned for tax evasion.

                "The value of the gift will be the value of the tickets at the time the gift is made."

                Tickets cost $1 or $2 but have zero value before they are validated and I'm pretty sure the idea here is to give them the ticket so they can have it validated.

                  PlayToWin47's avatar - Lottery-041.jpg
                  Joplin MO
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                  Posted: May 9, 2013, 6:03 pm - IP Logged

                  I don't think gift tax will be a problem because when your family members claim the prize they will be responsible for paying the taxes on the prize as regular income. The government will get their share.

                  I didn't even think about that.  That makes sense!

                    HoLeeKau's avatar - YheaShea
                    Idaho
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                    Posted: May 9, 2013, 6:12 pm - IP Logged

                    I don't think gift tax will be a problem because when your family members claim the prize they will be responsible for paying the taxes on the prize as regular income. The government will get their share.

                    But if OP had to claim all the tickets, the guv could double dip.  First OP pays his taxes, then there's an additional 25% due for any gifts he gives over 12K or 13K or whatever it is now.  And I believe that extra 25% is OP's responsibility, not the recipient.

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                      NY
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                      Posted: May 11, 2013, 1:59 am - IP Logged

                      This isn't a discussion about scratch-off players who you believe should claim their Free Ticket as gambling winnings on their 1040 or be imprisoned for tax evasion.

                      "The value of the gift will be the value of the tickets at the time the gift is made."

                      Tickets cost $1 or $2 but have zero value before they are validated and I'm pretty sure the idea here is to give them the ticket so they can have it validated.

                      A ticket has value that differs from the selling price the instant it's known to be a winning ticket. Validating it is simply part of the claiming process.

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                        Kentucky
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                        Posted: May 11, 2013, 9:36 pm - IP Logged

                        A ticket has value that differs from the selling price the instant it's known to be a winning ticket. Validating it is simply part of the claiming process.

                        The instant it's known is when it's scanned by a lottery terminal. If you're making an argument that players are responsible to know the value, it took Robert Miles seven years to find out the true value of his lottery ticket.

                          PlayToWin47's avatar - Lottery-041.jpg
                          Joplin MO
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                          Posted: May 13, 2013, 1:58 pm - IP Logged

                          I may want to resort to the easy option that would avoid all the issues with the gift tax ... Just collect all the money myself and write checks to anyone that I want to give a gift to, making sure nobody gets more than the current excluded limit.

                          I like things easy!!!

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                            NY
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                            Posted: May 13, 2013, 2:06 pm - IP Logged

                            The instant it's known is when it's scanned by a lottery terminal. If you're making an argument that players are responsible to know the value, it took Robert Miles seven years to find out the true value of his lottery ticket.

                            The instant it has value is the instant a drawing turns it into a winning ticket. Whether the player knows the value or not is irelevant.

                            You should Google "constructive receipt".

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                              Kentucky
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                              Posted: May 13, 2013, 5:09 pm - IP Logged

                              The instant it has value is the instant a drawing turns it into a winning ticket. Whether the player knows the value or not is irelevant.

                              You should Google "constructive receipt".

                              What is the value of an unclaimed ticket to the buyer after the expiration point was passed?

                              "You should Google "constructive receipt"."

                              I did and it applies to when a person or business receives ownership. In the scenario here, it's an implied ownership the friend or relative will have depending on the circumstances. What is the difference between this implied ownership than a living person's will?

                              They are buying them lottery tickets in every drawing and expect full compensation for the cost of the ticket when they give them ownership of the ticket.