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A VERY serious topic.

Topic closed. 41 replies. Last post 1 year ago by Teddi.

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Germany
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March 8, 2015
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Posted: November 15, 2015, 4:51 pm - IP Logged

"If you give more than that then you will owe gift taxes of 40%." 

Remember, the key word here is YOU.  You, as the person giving, will owe the gift tax.  Not the person who receives the money.  There is a lifetime exclusion amount, but it is small in terms of winning a few hundred mil.

Yikes, is that really how the US tax law works?

Why should I pay taxes on giving money away? The person who receives it should have it taxed as income, seems a lot fairer.

    realtorjim's avatar - images q=tbn:ANd9GcT7U3t20NgScoPlxOqLT6TR0vQeJNBV3_tTswe1XeFDTsdw3NLZ

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    February 27, 2011
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    Posted: November 15, 2015, 5:16 pm - IP Logged

    Yikes, is that really how the US tax law works?

    Why should I pay taxes on giving money away? The person who receives it should have it taxed as income, seems a lot fairer.

    If you drive a car, I'll tax the street
    If you try to sit, I'll tax your seat
    If you get too cold I'll tax the heat
    If you take a walk, I'll tax your feet

    The Beatles

    Yes, it is the way the US tax law works.  It is not income to the recipient because they did not work for it.  It is a gift.  Therefore gift tax is in order.  Before you try to make someone an employee, trying to circumvent the gift tax, you better check the tax codes because the pay better be within a general guideline for the position.  I.e. if they think you are trying to pull a fast one be prepared for their wrath.

    Now my advice for those who die
    Declare the pennies on your eyes

    I'm the taxman...

      I'm feeling a jackpot win coming my way!

      HoLeeKau's avatar - YheaShea
      Idaho
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      Posted: November 15, 2015, 6:33 pm - IP Logged

      Last I knew the gift tax was 25%!  40% is completely ridiculous!

        music*'s avatar - nw bookeep.jpg
        Happy California
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        Posted: November 16, 2015, 2:40 pm - IP Logged

        realtorjim, Thank You for The Beatles song,"I'm the tax man", it brings back good memories.

         Also, thanks for adding to my post about the $14,000.00 per person each tax year. This gift will be tax-free for both the giver and receiver.  40% would be a huge bite by the taxman. Ignorance of the law is no excuse.Approve

         Chi ha danari, trova cugini. (He who has money finds many cousins.) Italian proverb

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          NY
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          Posted: November 16, 2015, 4:26 pm - IP Logged

          "I wonder if you could form a club after you win"

          The answer is in the last 3 words I quoted. Anything that's done after you win is done with the money you won.

          "Last I knew the gift tax was 25%!  40% is completely ridiculous!"

          The purpose of the gift tax is to prevent people from avoiding the estate tax by just giving their estate away, so the gift tax rate has been the same as the estate tax rate since 1977. The gift tax rate hasn't been less than 35% anytime in the last 80 years, although the lifetime exemption was quite generous until the mid-70's. As of now the rate is 40%.

            Teddi's avatar - Lottery-008.jpg

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            May 13, 2013
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            Posted: November 16, 2015, 8:09 pm - IP Logged

            I don't. I was speaking in general. We hardly ever speak to each other. If one decided to give money to family and friends, how would it effect them and those around them? That is what I was posing to viewers.

            The best advice is learn from the mistakes of others. And I don't mean like the token Whitaker or Post who gets thrown up in every lottery conversation. 100% of everything that happened to them were their own fault. So take them out of the mix. Learn from athletes, celebrities, even successful lottery winners. The common thread in every single one of their stories is that relationships changed once their net worth made it above 7 figures. Not a single successful or lucky person escaped issue. Not a one. That should tell you everything right there and then you can plan accordingly. 

            As I said before, make sure you have a buffer between your money and anyone who isn't you. And whether or not you take the buffer advice, make sure you take this one: Always say no. To everything. Even if you think it's a great idea, say no. Why? Because you can always change your mind later. If you say yes to someone but after reflection or research you change your mind, then you're just begging for drama. It's a lose lose situation. 

            However, if you say no and then later change your mind, then everyone is happy. Plus, it gives you the opportunity to see how this person reacts to you saying no. That's a win win situation.

            I might wake up early and go running.  I might also wake up and win the lottery.

            The odds are about the same.

              Tialuvslotto's avatar - Jailin
              Texas
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              December 31, 2013
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              Posted: November 17, 2015, 7:06 am - IP Logged

              The best advice is learn from the mistakes of others. And I don't mean like the token Whitaker or Post who gets thrown up in every lottery conversation. 100% of everything that happened to them were their own fault. So take them out of the mix. Learn from athletes, celebrities, even successful lottery winners. The common thread in every single one of their stories is that relationships changed once their net worth made it above 7 figures. Not a single successful or lucky person escaped issue. Not a one. That should tell you everything right there and then you can plan accordingly. 

              As I said before, make sure you have a buffer between your money and anyone who isn't you. And whether or not you take the buffer advice, make sure you take this one: Always say no. To everything. Even if you think it's a great idea, say no. Why? Because you can always change your mind later. If you say yes to someone but after reflection or research you change your mind, then you're just begging for drama. It's a lose lose situation. 

              However, if you say no and then later change your mind, then everyone is happy. Plus, it gives you the opportunity to see how this person reacts to you saying no. That's a win win situation.

              You always give thoughtful and wise advise, Teddi.  Its almost like ... you've been there.

              "There is no such thing as luck; only adequate or inadequate preparation to cope with a statistical universe."

              ~Robert A. Heinlein

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                Posted: November 17, 2015, 8:52 am - IP Logged

                Yikes, is that really how the US tax law works?

                Why should I pay taxes on giving money away? The person who receives it should have it taxed as income, seems a lot fairer.

                example daily 3 because 1000 is easy for visualization

                players will spend $1000

                in order to win $500

                pay 40% taxes to keep $300

                pay 25% more if they give it all away as gift tax to have remaining $225

                don't gamble what you cannot afford

                the state has figured out how to keep 77.5% in some cases

                  cbr$'s avatar - maren
                  Cordova,Al.
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                  Posted: November 17, 2015, 2:22 pm - IP Logged

                  I Knew a couple who solve this problem. They shared their winning & earning as well without the government getting a lot of gift taxes! Both people lived to see to Hundred years old or older. In my opinion they worked a wise plan. In their opinion they feel the government have taxed them once so they saw no reason to let the government to tax them or their family twice on the same money, gift taxes.                                                         While  the couple was a live they give all their children , grandchildren, great- grandchildren ect... a check at Christmas time & on their birthday to each person exactly $1.00 below the taxable limit. There by the person enjoyed the gift, the government get no second hand. If you had a new child that person was add to the list. Trust funds were settle up for education uses only, for them with a board of trustee over looking it for each thereby it was all ways wiser to go to get you PHD. If you decided not to go to school , a age was give when they feel the person could have their money + not a second sooner. If you decided to you don't like the way thing the trustee was handle it. It you couldn't go along with what this couple lasts wishes, the trustee follow them to the letter of the law, you get written out of the agreement automatically. You loss your share other in your family continue get their unless they made the same mistake. A portion of your loss share was give to a Tax exempt organizations. All of them taught what to invest in as well. When to move to their money. When to travel , which countries to leave money in. Which state to go to make a capital gain. When to take a loss, [ to outsiders it appear to be a loss ] to this family it is away a positive note in it. None of this family real wants for anything that is good. I believe this couple had a lot of wisdom. The government only get money from the final check just what it was entitle to no more no less. The funny thing is what the government get in end could be  called a token or compare to a grain of sand at the bottom of the ocean. What this family was bless with was multiple over a thousand fold of the remaining grains at the the that same ocean floor. Think about it.

                    mypiemaster's avatar - 2015021003pileofcash
                    JACKPOT HUNTER

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                    Posted: November 17, 2015, 5:14 pm - IP Logged

                    It's never a good idea to start handing money out to friends and relatives, just because you won the lottery. If they were truly cool with you when your ass was broke, they should have no problem being cool with you now that you have $millions. After all, what's a few $millions between friends/relatives HUH?.

                    Seek and ye shall find -Matt. 7:7 ...Ask and ye shall receive -John 16:24 ...Give and it shall be given unto you -Luke 6:38 ...Be careful what you ask for!!! -Mypiemaster 1:1

                    Having Money Solves Problems That Not Having Money Creates Yes Nod ****John Carlton****

                      Teddi's avatar - Lottery-008.jpg

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                      Posted: November 17, 2015, 7:03 pm - IP Logged

                      example daily 3 because 1000 is easy for visualization

                      players will spend $1000

                      in order to win $500

                      pay 40% taxes to keep $300

                      pay 25% more if they give it all away as gift tax to have remaining $225

                      don't gamble what you cannot afford

                      the state has figured out how to keep 77.5% in some cases

                      Sometimes more than that. Consider the Texas man who killed all those people over the weekend being held on a $2.5 million bond. Also consider Kyle Navin who murdered his parents because he wanted their money, bond also at $2.5 million. Now consider the bf of the lottery winner whose bond was set at $3 million / $6 million because of heroin trafficking and guns. You better believe the government will find every single way it can to squeeze money from big lottery winners. Especially when you consider that Navin was also found in possession of heroin and guns.

                      I might wake up early and go running.  I might also wake up and win the lottery.

                      The odds are about the same.

                        Teddi's avatar - Lottery-008.jpg

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                        Posted: November 17, 2015, 9:19 pm - IP Logged

                        You always give thoughtful and wise advise, Teddi.  Its almost like ... you've been there.

                        Thanks, Tia! In a way I did. Except I earned every penny working 16-20 hour days. Before the recession I was in the unenviable position of being able to loan (which turned out to mean give) funds to a few family and friends. It was a no brainer. Someone I love needs help, I'm able to help, so I do. I may never fully recover from the way some of them treated me when it was time for them to repay. Or how much pleasure they took in how the recession affected me. 

                        The one (but very positive) thing that came from that experience is: now I know

                        Had I won the lottery before 2007, I would have been emotionally manipulated into giving away more than I should. I'd have been a lottery statistic. But what happened to me educated me. I'm now emotionally strong enough to say "NO!" to anyone & not care about how they'll react. 

                        I'd much rather keep my money and be vilified, than end up broke and still be vilified. Cynthia Stafford's sister was all over the internet badmouthing Cynthia for not giving her a dime. I say good for her.

                        I might wake up early and go running.  I might also wake up and win the lottery.

                        The odds are about the same.