Welcome Guest
Log In | Register )
You last visited December 4, 2016, 7:09 am
All times shown are
Eastern Time (GMT-5:00)

In Group Winners: can the payout other than split evenly ?

Topic closed. 18 replies. Last post 2 years ago by RedStang.

Page 1 of 2
PrintE-mailLink
Avatar
New Member

United States
Member #165800
April 22, 2015
6 Posts
Offline
Posted: April 22, 2015, 5:47 pm - IP Logged

I haven't hit yet & am looking to set up a group properly.

For instance; can members be paid by a percentage of the total tickets they bought ? Say the total tickets bought is 12 but one member bought 1 ticket, another 3, etc. Can the one member be given 1/12th, the other 3/12ths, etc ? Or does the jackpot have to be split evenly ? Because some members can't afford as much so it would limit the groups chances.

Another instance: I buy the winning ticket but am limited by the state as to how much I can give my grown children & relatives each year before a tax penalty. Can I say they each won $1 million of the jackpot instead ?

I know in California the lottery says they will send the check amounts according to the group agreement. I'm concerned about what the IRS will say (or try to assume) and how to shape the agreement.

I also know there are other ways to get the monies to them but I'm fantasizing about a cut & dried method.

Any Comments or help is welcomed.

    Avatar

    Canada
    Member #154380
    April 14, 2014
    57 Posts
    Offline
    Posted: April 22, 2015, 7:13 pm - IP Logged

    Yes to both questions. A member of a group can have multiple shares (supported by an agreement of course).

    Yes to helping out family. When claiming the ticket, tell them it was a family ticket. You do not need proof of an agreement even though one is always a good idea. A verbal agreement is enough.

      Avatar
      New Member

      United States
      Member #165800
      April 22, 2015
      6 Posts
      Offline
      Posted: April 23, 2015, 1:50 pm - IP Logged

      Yes to both questions. A member of a group can have multiple shares (supported by an agreement of course).

      Yes to helping out family. When claiming the ticket, tell them it was a family ticket. You do not need proof of an agreement even though one is always a good idea. A verbal agreement is enough.

      Thanks for that. I see you are from Canada, do you know if your reply applies to California ?

      I'm still looking for feedback about the IRS on this setting.

        savagegoose's avatar - ProfilePho
        adelaide sa
        Australia
        Member #37136
        April 11, 2006
        3300 Posts
        Offline
        Posted: April 23, 2015, 2:52 pm - IP Logged

        if you think you need the agreement soon before your pool wins....

        welcome to lottery post

         

        oh and get an agreement, like a statutory declaration signed before a JP , before you win explain the share of payments and stick to it

        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

          Avatar
          New Member

          United States
          Member #165800
          April 22, 2015
          6 Posts
          Offline
          Posted: April 23, 2015, 4:06 pm - IP Logged

          if you think you need the agreement soon before your pool wins....

          welcome to lottery post

           

          oh and get an agreement, like a statutory declaration signed before a JP , before you win explain the share of payments and stick to it

          Thanks for your thoughts. I wasn't planning on a yearly accounting, just a month by month like we used to do at work.

          I am just wondering if the IRS will try to create a problem with tirered or unequal payout amounts.

          I have also read that its a practice to just have the agreement notarized just before you turn in a winning ticket, otherwise its ok to be informal with small amounts.

            Avatar
            Kentucky
            United States
            Member #32652
            February 14, 2006
            7297 Posts
            Offline
            Posted: April 23, 2015, 4:38 pm - IP Logged

            I haven't hit yet & am looking to set up a group properly.

            For instance; can members be paid by a percentage of the total tickets they bought ? Say the total tickets bought is 12 but one member bought 1 ticket, another 3, etc. Can the one member be given 1/12th, the other 3/12ths, etc ? Or does the jackpot have to be split evenly ? Because some members can't afford as much so it would limit the groups chances.

            Another instance: I buy the winning ticket but am limited by the state as to how much I can give my grown children & relatives each year before a tax penalty. Can I say they each won $1 million of the jackpot instead ?

            I know in California the lottery says they will send the check amounts according to the group agreement. I'm concerned about what the IRS will say (or try to assume) and how to shape the agreement.

            I also know there are other ways to get the monies to them but I'm fantasizing about a cut & dried method.

            Any Comments or help is welcomed.

            The lottery in the state where you purchase the tickets will give you the accurate information. Some states will only issue one check and it's the bearer's responsibility to distribute the money.

            Before you start your group, search the LP news archives and read some of the many stories about "group winner" lawsuits.

              Avatar

              Canada
              Member #154380
              April 14, 2014
              57 Posts
              Offline
              Posted: April 23, 2015, 11:10 pm - IP Logged

              Thanks for that. I see you are from Canada, do you know if your reply applies to California ?

              I'm still looking for feedback about the IRS on this setting.

              Yes, my response also applies to California.

              You will find many people on this forum are anti-groups. Its like asking them if you should buy a car and they say no because of all the accidents they have read about.

              Group agreements do not have to be notarized. A simple signed agreement or even an email is enough to prove intent. Something in writing that is clear in its intent. Groups that have had problems had verbal agreements and confusing rules open to interpretation.

                Avatar
                New Member

                United States
                Member #165800
                April 22, 2015
                6 Posts
                Offline
                Posted: April 24, 2015, 2:39 pm - IP Logged

                Yes, my response also applies to California.

                You will find many people on this forum are anti-groups. Its like asking them if you should buy a car and they say no because of all the accidents they have read about.

                Group agreements do not have to be notarized. A simple signed agreement or even an email is enough to prove intent. Something in writing that is clear in its intent. Groups that have had problems had verbal agreements and confusing rules open to interpretation.

                I tend to agree with you. I followed Stack47's advice and did more research about lottery lawsuits but found out I had already read them. Most wouldn't apply to this group since it is not a work place setting. The few people in the group is no problem. The family ticket setup also would be no problem.

                I wonder if the individual group winners can still somehow give a million or so to family without an IRS penalty. I believe the current gift is $20,000.

                  Avatar

                  Canada
                  Member #154380
                  April 14, 2014
                  57 Posts
                  Offline
                  Posted: April 24, 2015, 4:05 pm - IP Logged

                  I tend to agree with you. I followed Stack47's advice and did more research about lottery lawsuits but found out I had already read them. Most wouldn't apply to this group since it is not a work place setting. The few people in the group is no problem. The family ticket setup also would be no problem.

                  I wonder if the individual group winners can still somehow give a million or so to family without an IRS penalty. I believe the current gift is $20,000.

                  Gifting the money would be a problem. Your best option is to claim they are part of a lottery group. If your intention is to give them money, then you are within the spirit of the law.

                    Avatar
                    Kentucky
                    United States
                    Member #32652
                    February 14, 2006
                    7297 Posts
                    Offline
                    Posted: April 24, 2015, 10:01 pm - IP Logged

                    Gifting the money would be a problem. Your best option is to claim they are part of a lottery group. If your intention is to give them money, then you are within the spirit of the law.

                    Even in the state lotteries that divide the prize equally for a pool, they won't subdivide shares. The taxes on any other money distribution is determined by the IRS rules. The amount paid in and the prize distributions was equal; everybody contributed the same.

                    From what I read so far, if this pool wins a jackpot, we'll be reading about the lawsuit on LP news.

                      Avatar

                      Canada
                      Member #154380
                      April 14, 2014
                      57 Posts
                      Offline
                      Posted: April 25, 2015, 10:29 am - IP Logged

                      Stack47, I do not think you understand how group play works.

                        Avatar
                        New Member

                        United States
                        Member #165800
                        April 22, 2015
                        6 Posts
                        Offline
                        Posted: April 25, 2015, 1:48 pm - IP Logged

                        Stack47, I do not think you understand how group play works.

                        I think what Stack47 is saying is that whatever the shares paid out to group members that shares theirs with their families is taxable under a different set of rules. Those rules would limit it to the yearly amounts the IRS allows as a gift without double taxes. I think that is $20,000 per family member per year.

                        What you said is that the family members would have to be included in the group with the amounts set in the agreement, whether that would be by amounts of tickets bought each, a percentage, a set amount each, or divided equal.

                        I do know the California lottery will pay out the amounts set in the agreement. What I don't know, and probably can't know until after, is what the IRS would try to do.

                          Avatar
                          NY
                          United States
                          Member #23835
                          October 16, 2005
                          3474 Posts
                          Offline
                          Posted: April 25, 2015, 3:50 pm - IP Logged

                          Yes to both questions. A member of a group can have multiple shares (supported by an agreement of course).

                          Yes to helping out family. When claiming the ticket, tell them it was a family ticket. You do not need proof of an agreement even though one is always a good idea. A verbal agreement is enough.

                          "When claiming the ticket, tell them it was a family ticket. You do not need proof of an agreement"

                          You clearly haven't done enough research.

                            Avatar
                            New Member

                            United States
                            Member #165800
                            April 22, 2015
                            6 Posts
                            Offline
                            Posted: April 25, 2015, 3:59 pm - IP Logged

                            "When claiming the ticket, tell them it was a family ticket. You do not need proof of an agreement"

                            You clearly haven't done enough research.

                            My comment was on combining family members and non-family members.

                            It seems that the family members needs to be in the group instead of the individual group winners saying their share is a family ticket.

                            It isn't possible to combine the 2 types.

                              Avatar
                              Kentucky
                              United States
                              Member #32652
                              February 14, 2006
                              7297 Posts
                              Offline
                              Posted: April 25, 2015, 6:47 pm - IP Logged

                              I think what Stack47 is saying is that whatever the shares paid out to group members that shares theirs with their families is taxable under a different set of rules. Those rules would limit it to the yearly amounts the IRS allows as a gift without double taxes. I think that is $20,000 per family member per year.

                              What you said is that the family members would have to be included in the group with the amounts set in the agreement, whether that would be by amounts of tickets bought each, a percentage, a set amount each, or divided equal.

                              I do know the California lottery will pay out the amounts set in the agreement. What I don't know, and probably can't know until after, is what the IRS would try to do.

                              Each state lottery has their own rules on how they distribute shared ticket jackpot prizes and some will give an equal share minus tax deductions. If you are the sole ticket owner, you could have the lottery divide the prize equally among family members in states that allow it. But I know of no US lottery that subdivides individual shares.

                              If you have ten members in your group and your ticket wins the jackpot, the best you can expect is ten equal individual checks.