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How to share with relatives.

Topic closed. 6 replies. Last post 4 years ago by haymaker.

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Oak park, il
United States
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March 29, 2012
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Posted: May 24, 2013, 2:33 pm - IP Logged

I have been thinking about this topic a great deal particularly because of the recent huge Powerball jackpot.  How can you give huge monetary gifts to your family without getting hit hard with the gift tax?  Is it even possible?  I have 5 siblings and would like to take care of my parents.  Would prefer to just give them a lump sum and be done with it.  Does anyone know the best way to give in this way after winning a jackpot?

 

Thanks

    redhot7's avatar - SetforLifeLogo
    California
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    June 17, 2011
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    Posted: May 24, 2013, 2:42 pm - IP Logged

    the easiest way to do it is by splitting your winning like an office pool. The drawback is you can not pick and choose how much each person is going to get. You and everybody else in the pool would get the same amount and they still have to pay income taxes.

      HoLeeKau's avatar - YheaShea
      Idaho
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      July 17, 2010
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      Posted: May 24, 2013, 4:52 pm - IP Logged

      the easiest way to do it is by splitting your winning like an office pool. The drawback is you can not pick and choose how much each person is going to get. You and everybody else in the pool would get the same amount and they still have to pay income taxes.

      I believe some states will allow you to assign different shares to each pool member.  I know that not all will allow it but I'm not sure which ones will.

      I think Idaho used to allow it because at work we had a pool where each person could choose how much to put in.  If you put $5 in you'd get five shares as opposed to the person who only put $1 in and would only get one share.  That was 15 years ago.

        PlayToWin47's avatar - Lottery-041.jpg
        Joplin MO
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        January 28, 2013
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        Posted: May 24, 2013, 6:05 pm - IP Logged

        I believe some states will allow you to assign different shares to each pool member.  I know that not all will allow it but I'm not sure which ones will.

        I think Idaho used to allow it because at work we had a pool where each person could choose how much to put in.  If you put $5 in you'd get five shares as opposed to the person who only put $1 in and would only get one share.  That was 15 years ago.

        Yes, that's true.

        Unless they've changed things, Missouri would let the winnings be split by either a fixed amount or a percentage.

          haymaker's avatar - Lottery-012.jpg
          Egg Harbor twp.south Jersey shore
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          Posted: May 24, 2013, 6:25 pm - IP Logged

          Not sure what the difference is,

          uncle SAM w/holds 25% of 10 mils. from 1 person, you,

          or he w/holds 25% of 2.5 mils. from 4ppl. you and 3 you share it with.

          or however many you choose to share it with, gov't still going to get 25% and up to to 39.6%

           

          plus if you live in Jersey you get ripped off for an additional 10.8%

          Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

            redhot7's avatar - SetforLifeLogo
            California
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            Posted: May 24, 2013, 6:34 pm - IP Logged

            Not sure what the difference is,

            uncle SAM w/holds 25% of 10 mils. from 1 person, you,

            or he w/holds 25% of 2.5 mils. from 4ppl. you and 3 you share it with.

            or however many you choose to share it with, gov't still going to get 25% and up to to 39.6%

             

            plus if you live in Jersey you get ripped off for an additional 10.8%

            If you actually need to pay less than 25%, you should be able to get a refund from the IRS or have your actual income tax credited when you file. For example: if one wins 7M from CA SLP and the winner chooses annuity, the first year payment would be $126,700. The average tax rate from such income would be about 20.5%

              haymaker's avatar - Lottery-012.jpg
              Egg Harbor twp.south Jersey shore
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              Posted: May 24, 2013, 6:50 pm - IP Logged

              If you actually need to pay less than 25%, you should be able to get a refund from the IRS or have your actual income tax credited when you file. For example: if one wins 7M from CA SLP and the winner chooses annuity, the first year payment would be $126,700. The average tax rate from such income would be about 20.5%

              Well, yea, depending on the individual, the final tax bill is going to come out different,

              but my point was uncle sam is going to get a a pretty big chunk no matter how you slice the cake.

               

              your earlier post about treating it like an office pool is probably the way to go.

              Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.