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If you won a huge jackpot would you feel obligated to share it?

Topic closed. 57 replies. Last post 2 years ago by Toronto.

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mikeintexas's avatar - tx avatar-1.gif
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Posted: October 12, 2014, 4:32 pm - IP Logged

Mike..........I think in addition to the max allowed dollar figure, I would also consider doing this, should I choose to share even more...buying low dollar money orders(under $175.00) from a machine or $50 + $100 gift certificates from that big named store that begins with a  W..maybe the same amount from that orange store that has an H and a D in it or a gas card. Possibly gift certificates to various restaurants or any place that I know of that the people I give to will utilize throughout the year.
It would give me something to accomplish each month for a couple of  days, running around getting them  from various locations(not to draw attention to yourself) and mailing them out  Big Grin Santa

That's what I'd do too, but didn't say anything "just in case" the IRS is watching. <wink> Seriously, I think the IRS is only concerned about substantial transfers of cash/property.  I don't know anyone who ever - for example - bought a car for their kids and declared it or had the IRS go after them because of the gift.  (I believe you can transfer money to your spouse, but I haven't read anything about minor children)  I have given out those gift cards for presents and while some people say they're too impersonal, I like to get them as presents.    Several years ago I got three gift cards for Christmas to a local video store, then I got my hours severely cut at work - was only temporary, but at least I had some free entertainment during that time.  I think I watched about fifty movies in a month.

    mikeintexas's avatar - tx avatar-1.gif
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    Posted: October 12, 2014, 4:38 pm - IP Logged

     Mikeintexas, you brought up the gift tax and I mentioned that the donee should pay the gift tax.  So, the following year the donee is taxed again on the same money plus their income under the income tax.  I think this is correct, do you agree?

    Maybe I'm misunderstanding you, but no, I don't see how they'd have to pay taxes again on the "same money". I figure it's like any other sort of income, the taxes would be due by April 15th.  There's a form you fill out as the donor, but not sure about what one for the donee.  Don't take my word as coming from any type of expert, please; I'm just going by what I read online, but I'd sure consult a tax attorney if/when you ever give some of your lottery winnings away.

    That's nice that people want to give money away and I would too, but I would have already paid out more than enough and that's the same thing I'd tell anyone getting a gift from me.   I don't think anyone would (or should) complain about it, but if they did, then that would be the last money they'd get from me.


    A people that elect corrupt politicians, impostors, thieves and traitors are not victims...but accomplices.
     - George Orwell

      mikeintexas's avatar - tx avatar-1.gif
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      Posted: October 12, 2014, 4:52 pm - IP Logged

      if I won the 500 Mil Powerball or Mega Million, I am not greedy ...

      I will only keep 15 Mil for my own use and give the rest away ... 

       

      I dont need 500++ Mil 

      I would keep just 15 Mil and give the rest to charity ... giving first preferences to single mothers in need ... 

       

      Because ???

       

      Not Because ... It is "Why Not" ???

      15 Mil is more then enough for myself, What am I going to do with 500++ Mil ???

      and I get to help out the needy of America as well ... 

      And of course, I can walk away from this a very happy person as well ... 

      Why Not ... Why Not ... 

       

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      I understand your sentiment and it's a noble one, but as I mentioned and linked to above, there's a limit.  You really should be able to give your money away to whomever you like, but that's not the case.    Personally, if I win a huge sum, I'm starting a foundation in my grandmother's name;  she asked me to do it while she was on her deathbed and it's one of the main reasons I play the lottery.   It will be a little involved to set up and I'll have to get others to serve on the foundation's board, find a good lawyer that won't charge too much to administer it and make arrangements about how to replace the lawyer/board members when they no longer are able or want to be involved.  A LOT of charities are funded by foundations that were started by business tycoons, etc.   Even at a fairly low rate of interest, a million bucks could provide $10k+ annually to good causes.   My grandmother would have wanted donations to her small church, Boy's Ranch and the local Good Samaritan's, which helps people w/ utility bills and donated food and clothing.

      If I ever win a substantial sum, enough to move, I'm donating my house to the local battered women's org.  There are several "safe houses" here in town where a woman and kids (if any) can have a temporary safe haven if needed.

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        Posted: October 12, 2014, 6:03 pm - IP Logged

        Thanks Mikeintexas, I think I was over thinking this.

          noise-gate's avatar - images q=tbn:ANd9GcR91HDs4UJhjxO7cmeMQWZ5lB_FOcMLOGicau4V74R45tDgPWrr
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          Posted: October 12, 2014, 8:42 pm - IP Logged

          The question reads- if YOU won, that sounds singular to me.Just because it's family,  that is not a reason to be taken advantage of. Just because I change the tires on my car does not mean everyone in the family gets a free set of tires. My brother & sisters would not expect me to shower them with money since they are successful in their own right, but l would give them a decent cut ..why? Because l love my family and would like them to share in my windfall.

          As for charities- don't call me, l will seek you out, no outside pressure required thank you very much. 

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            Posted: October 13, 2014, 4:08 am - IP Logged

            That is good info, but I would hope the donee will agree to pay the taxes.

            Give me a million bucks and I'll be glad to pay the taxes. As a matter of practicality the way to do it is to make a smaller gift that results in the tax bringing your total outlay to the amount you're willing to part with. For example, instead of giving somebody $1 million you could give them $714,285, and then pay $285,715 in gift tax.

            As far as other gifts, the $5.34 million lifetime exclusion only applies if you die this year, and it only applies to one person. If you're married you can each give away $5.34 million. If you're alive on 1/1/2015 you can give away the balance of the 2015 exemption. That exemption is expected to be about $5.43 million (a modest 1.6% increase), so that's another 90k you (and a spouse) can give away.

            The $14k limit is per person, per year. Gifts that don't exceed that limit don't apply to the lifetime limit. If you and your spouse are mormons or good Irish catholics with 150 great great grandchildren you can make 150 gifts of $28,000 this year for a total of $4.2 million and do it again every year until you're broke.  If all 150 great great grandchildren are married you can also give 28k to each f them, for an annual total of $8.4 million. The only catch is that if you die within 3 years the IRS may call it a gift in anticipation of death and consider those funds to be a taxable part of your estate.

            You can also make gifts to pay for somebody's medical bills or education that are exempt from the gift tax limits.

            Of course as Mike notes, you can share even the most expensive lottery ticket without making a gift that's big enough to matter. A 5% share of a $2 PB ticket for Wednesday night is only worth 10 cents right now. A notarized affidavit is certainly a good way of establishing that the gift was made before the ticket became valuable, but it's the information you document that matters, not how you document it.  An affidavit that just says you're gifting share of a ticket doesn't count for much, because it doesn't say very much. One that describes the circumstances in which you'll buy and make gifts, along with specifying what you're gifting (ie, n% to Bill, and x% to Fred)  is what's important.

              helpmewin's avatar - dandy
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              Posted: October 13, 2014, 5:37 am - IP Logged

              Yes Yes Nod

              Let it Snow Snowman

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                Posted: October 13, 2014, 9:40 am - IP Logged

                Cool  Yes. Check please. Smiley

                  cbr$'s avatar - maren
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                  Posted: October 13, 2014, 1:49 pm - IP Logged

                  I've seen many a post around these boards about how if a person won a huge jackpot they would split it between their siblings and parents...

                  Personally I can't see myself SPLITTING  anything (I'm talking like a 25/25/25/25 split). I could see myself giving my intermediate family a few million, but not a large percentage and definitely not because I feel obligated to give them a part of the money, but because I'd want to.

                  I definitely am not a charity person (OH NO!!!) so until I find one that touches on something that I care about I'm not giving a cent to any charities.

                  Then again I'm a pretty self-centered person.

                  What is your take?

                  Yes, I would shared. When you give to your church which is considered - non profit. It's a tax write- off. There are other organizations that fit this category. There are some special interest groups , which normally you couldn't write- off just by handing them a donation. If the check read for educational purposes only. It can become a tax write-off. A lot of organizations will not tell you this right away, why until you give a special purpose for the use of the money, it go to where they want to go. If you give the check a purpose, the organization has to , use it for that purpose only . Otherwise they have to return it. Depending on state, Gift taxes are paid by the person who , get the gift. When a lawyer handles it, the taxes are paid before they receive the gift. It only a few states left, that let wait to pay the taxes on the gift. It is wise to check the IRS web site. The second thing to check , is if you are going to owe taxes to the new state your are moving too in the end. What if the new state decide you didn't pay enough taxes on your win for that year? Now, these state want a piece of the rock. These is a ouch!!Confused

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                    Posted: October 13, 2014, 2:16 pm - IP Logged

                    OneAboveAll:

                    Psyko agree with UR post win plans 4D management of UR JACKPOT win'$$$$$!!!!

                                                               Hurray!Hurray!   BUT  Hurray!Hurray!

                    after.......giving 2UR first preference would U consider helping the African people

                    who R dying HORRIBLE death of the EBOLA Bat virus disease 24/7 each day!!!

                    Make sure UR money goes 2D African people "directly", because U may B the WON

                    who STOP'$$$$$$$ this THING over their NOW!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

                    Over here, it cost 2 much in our health care system 2 fight D THING>>>>>like it

                    cost $20,000 dollars per patient each day 2 care 4 each person ND hospital room.

                    It cost $150,000 2 send a clean-up crew 2 where they once lived and clean good!

                    This cost is only the beginning of the cost spending over here cause they got 2

                    start screening all people who was in contact of the sick person plus their family.

                    REMEMBER the people N Africa R now DYING Bat FASTER than they bury them.

                    UR gift ($$$) will reach & cure many, many, many more

                    people N Africa & will cost much less ($$$) per person!!!

                                                 US Flag White Bounce US Flag

                      mikeintexas's avatar - tx avatar-1.gif
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                      Posted: October 13, 2014, 4:15 pm - IP Logged

                      Give me a million bucks and I'll be glad to pay the taxes. As a matter of practicality the way to do it is to make a smaller gift that results in the tax bringing your total outlay to the amount you're willing to part with. For example, instead of giving somebody $1 million you could give them $714,285, and then pay $285,715 in gift tax.

                      As far as other gifts, the $5.34 million lifetime exclusion only applies if you die this year, and it only applies to one person. If you're married you can each give away $5.34 million. If you're alive on 1/1/2015 you can give away the balance of the 2015 exemption. That exemption is expected to be about $5.43 million (a modest 1.6% increase), so that's another 90k you (and a spouse) can give away.

                      The $14k limit is per person, per year. Gifts that don't exceed that limit don't apply to the lifetime limit. If you and your spouse are mormons or good Irish catholics with 150 great great grandchildren you can make 150 gifts of $28,000 this year for a total of $4.2 million and do it again every year until you're broke.  If all 150 great great grandchildren are married you can also give 28k to each f them, for an annual total of $8.4 million. The only catch is that if you die within 3 years the IRS may call it a gift in anticipation of death and consider those funds to be a taxable part of your estate.

                      You can also make gifts to pay for somebody's medical bills or education that are exempt from the gift tax limits.

                      Of course as Mike notes, you can share even the most expensive lottery ticket without making a gift that's big enough to matter. A 5% share of a $2 PB ticket for Wednesday night is only worth 10 cents right now. A notarized affidavit is certainly a good way of establishing that the gift was made before the ticket became valuable, but it's the information you document that matters, not how you document it.  An affidavit that just says you're gifting share of a ticket doesn't count for much, because it doesn't say very much. One that describes the circumstances in which you'll buy and make gifts, along with specifying what you're gifting (ie, n% to Bill, and x% to Fred)  is what's important.

                      I was all ready to argue, but a little bit more detailed research shows you are right.  I was under the impression that the 5.4 million was the cap on non-taxable gifts @ $14k/yr.  but I now see the 5.4 million is an estate exemption, that your heirs can inherit that amt. of cash and/or property tax-free.  Where I misunderstood was with the phrasing "lifetime gift exclusion".   That's good to know - that you can give each family member (or friends)  $14k/yr. for as long as you live. (or until your money runs out)

                      Also, as I mentioned earlier, you certainly can pay for someone's medical expenses or tuition, but the payment has to be made directly to the doctor or hospital or the school.

                      I'm not convinced about the sharing a JP with others, though.  I forget the details, but I remember that waitress who got a share of a lottery win as a tip - she set up a corporation to share her portion of the lottery w/ her family and she got into trouble with the IRS.  Dealing with the IRS is like those churches that handle snakes; they can get by with it for a while, but they eventually get bitten.   You definitely need some sort of agreement beforehand if you're planning on sharing a JP.

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                        Posted: October 13, 2014, 4:18 pm - IP Logged

                        "Obligated?"  NO, would I, depending on the size, would split or gift part.  Ie a 600 million jackpot is large enough to comfortably split between my 8 siblings and parents.  Everyone would have enough to live on or blow to their preference.  A 25 mill jackpot is not large enough to split among 11 people to live comfortably, that would be gifts.

                         

                        other than that, would enjoy reading all the heartbreaking, sob story, crazy investment, job opportunity letters, etc that come with the opportunity.  A few would be legitamit, but most would be scams.  The fun would be in quietly investigating and surprising the legitimate ones!  Who knows, I might be walking up your driveway one day to pay your lottery post membership.  Jester Laugh

                         

                        Of course, the profits from the book recording this life changing experience would be donated to:  drumroll please .... Best method of scamming lottery winners.  Green laugh

                         

                        Actually, if the dream comes true, donations will be made to a prechosen list of  registered 501C charities and research foundations.  None of wich would be publicly revealed to avoid them being overrun with requests for assistance!

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                          Posted: October 13, 2014, 7:13 pm - IP Logged

                          I think that if I was lucky enough to win a jackpot in the lotto I would be willing to pay off debt for my family members.  That is how I would help bye getting rid of their debt they have so it frees up money that they are spending to get rid of debt in the first place.  It would only be my immediate family though no relatives or long lost cousins to help.  I would hope that once out of debt my family would try and not take advantage of me bye buying things that get them back into debt hoping for me to bail them out of debt again and again.-weshar75

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                            Posted: October 14, 2014, 2:07 am - IP Logged

                            if I won a jackpot, I would be obligated to "share" it with Uncle Sam. The IRS is going to want 39.6% of the money Unhappy

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                              Posted: October 14, 2014, 3:44 am - IP Logged

                              " I remember that waitress who got a share of a lottery win as a tip - she set up a corporation to share her portion of the lottery w/ her family and she got into trouble with the IRS.  ... eventually get bitten."

                              If you're thinking of a Waffle House waitress from Alabama, Karma is what bit her in the ass. Supposedly all of the waitresses had an agreement to share, but the winner denied it. A court found that there was an oral contract, but said the contract was unenforceable, because it was about gambling, which was illegal in Alabama. That left the other waitresses SOL. After sharing the prize with her family she claimed they had an oral agreement to share, but there was no documentation and the court ruled that there was no contract. Even if there had been, she'd presumably have run into the same problem of having an unenforceable contract.

                              FWIW, part of the court's reasoning was that, as a gift from a customer, the ticket wasn't acquired by the family or with the intention of being shared with the family. It also noted that the ticket itself wasn't available to the family, which may be particularly important because she gave the family a 51% share. We'll never know if the ruling  might have been different if she had bought the ticket herself, and therefore had a better argument that it was purchased based on  an agreement to share amongst the family.