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If you won the lottery, would you wait until 2017 to claim?

41 replies. Last post 7 days ago by QuickDrawDude.

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If you won the lottery, would you wait until 2017 to claim?

Yes, I would wait until 2017. [ 27 ]  [50.00%]
No, I would not wait. [ 27 ]  [50.00%]
Total Valid Votes [ 54 ]  
Discarded Votes [ 2 ]  

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whiteballz's avatar - Lottery-015.jpg
Nutley, New Jersey
United States
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August 1, 2012
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Posted: November 16, 2016, 9:30 am - IP Logged

It looks like Trump's proposed tax brackets have 33% as the top rate for federal income tax. If you won a big jackpot would you wait until 2017 to claim your winnings hoping to only pay 33% instead of 39.6%?

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    United States
    Member #173496
    March 5, 2016
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    Posted: November 16, 2016, 9:50 am - IP Logged

    I would wait just so that I could claim it on inauguration day.

    I would be way low in the news reel priority because we all know it is going to be crazy in DC and other major cities on that day

      mikeintexas's avatar - tx avatar-1.gif
      Texas Panhandle
      United States
      Member #136843
      December 20, 2012
      1258 Posts
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      Posted: November 16, 2016, 1:25 pm - IP Logged

      That's always been something I've wondered about.  There was a thread a while back when I mentioned that I would wait until after the first of the year so I could earn interest on the 14.6% of the cash value JP total since it could be up to 14 months or so until I had to pay the rest of the taxes owed.   With a sum like tonight's PB, you could earn something like $135k on CDs that paid just .5%.(of course, there are ways to make quite a bit more than that, but I was being ultra-conservative in my estimation)  Someone chimed in and said there was the possibility of having to make quarterly payments on taxes owed.

      Then I learned about "constructive receipt" and did some more reading on it.  In a nutshell, it's not when you WANT to claim, it's when you CAN claim.  (there have been some legal cases challenging that, I have read).  The Powerball website FAQ says this:  It takes up to two weeks to collect the cash from the stores around the nation. If you go to the lottery to claim your prize after that two weeks, then, in many states, you can generally have the jackpot money (all cash or the first of the annual payments) hit your bank account the next day - maybe the following day if you come to the lottery office very late in the day. Some lotteries must work through the state system and that can delay the payment.

      So, winning the lottery near the end of the year would make it really close on constructive receipt.  I have even considered what would happen if the earliest you could collect your prize was on the 25th of December...but that's Christmas and the lottery offices would be closed. 

      So, do a search for "constructive receipt of lottery winnings" and read some of the opinions on various message boards. (and my advice* is to take them with a grain of salt, same as with MY opinion you're now reading)  One of the first results is to a PDF at the IRS website;  I d/l and read it a while back, but can't remember too much about it other than thinking it really didn't give a definitive answer.  What else is new?

      *And one more bit of advice is again to not take anything some doofus like me says as an expert opinion, but to seek the counsel of someone expertly qualified in tax law.

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        United States
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        November 29, 2012
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        Posted: November 16, 2016, 2:32 pm - IP Logged

        Gambling that he'll be able to get that done in the year, then giving up the time value of money (you don't earn interest while you wait to collect).

          weshar75's avatar - Lottery-042.jpg
          Mcminnville, Oregon
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          Posted: November 16, 2016, 4:48 pm - IP Logged

          I would not wait for the new year I would go get my check now!-weshar75

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            Tatototman65's avatar - Lottery-009.jpg

            United States
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            February 4, 2013
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            Posted: November 16, 2016, 6:08 pm - IP Logged

            I would not wait for the new year I would go get my check now!-weshar75

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            I Agree!

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              music*'s avatar - nw bookeep.jpg
              Happy California
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              Posted: November 16, 2016, 6:10 pm - IP Logged

               I would wait. I will then use that time to get all of my ducks lined up and form a team. Professional financial advisers will be needed for as long as you are wealthy.

               I have read that even President-elect Donald J. Trump uses advisers.

               I've been rich and I've been poor. Believe me, rich is better. 

               Attributed to Joe E. Lewis and others

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                NYC
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                November 17, 2014
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                Posted: November 16, 2016, 7:26 pm - IP Logged

                It looks like Trump's proposed tax brackets have 33% as the top rate for federal income tax. If you won a big jackpot would you wait until 2017 to claim your winnings hoping to only pay 33% instead of 39.6%?

                So what are the odds of the new federal tax rate getting approved by congress. Or who ever passes it.

                  LottoAce's avatar - WWI Flying_Ace.gif
                  N.C.
                  United States
                  Member #56005
                  October 28, 2007
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                  Posted: November 16, 2016, 8:17 pm - IP Logged

                  I would like to think I would wait untill Christmas and claim it right before the New Year.
                  thats just me. less publicity. everyone is too busy with everything
                  else going on.

                  but I would make sure I was set up before doing so.

                  "know your limitations, but excede your expectations"

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                    Florida
                    United States
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                    January 3, 2016
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                    Posted: November 16, 2016, 9:16 pm - IP Logged

                    I would take 2-3 weeks to get my ducks in a row, then claim on a Friday afternoon. No way I am waiting until next year, too much can happen in that time! It's just like someone said in another thread, the ticket is safest when it is claimed at the lottery office!

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                      Kentucky
                      United States
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                      February 14, 2006
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                      Posted: November 17, 2016, 12:50 am - IP Logged

                       I would wait. I will then use that time to get all of my ducks lined up and form a team. Professional financial advisers will be needed for as long as you are wealthy.

                       I have read that even President-elect Donald J. Trump uses advisers.

                      The wait is less than 50 days and worth it getting interest for 15 month on the 14% extra tax you may or may not owe.

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                        NY
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                        October 16, 2005
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                        Posted: November 17, 2016, 1:34 am - IP Logged

                        "it's when you CAN claim."

                        It's not when you can claim it. It's when you can collect it.

                        "there have been some legal cases challenging that"

                        I don't know about cases challenging the fact that you have constructive receipt [when_you_can_collect_it], but there have definitely been cases about when you can actually collect it. What's absolutely certain is that you can't collect it until you submit a claim, the lottery validates the claim, and the money is transferred to an account from which the money can be paid to you. One of those cases is one in which the IRS argued exactly that, in an effort to have a winner's prize declared taxable in the year after the one in which the winner claimed his prize and declared the income. IIRC, the IRS argued that until the ticket is validated and accepted as the winning ticket there's a chance it could turn out that it's not the winning ticket and that you therefore can't have constructive receipt prior to that time, it would be rather awkward for the IRS to go to court now and claim that you do have constructive receipt before the lottery declares that the ticket is in fact a winner. Of course it's possible that there may be state laws that would say otherwise in regard to when you've got constructive receipt for the purposes of state taxes, but that has no bearing on the federal taxes.

                         

                        "I would not wait for the new year I would go get my check now!"

                        Sure. Why wouldn't you claim it now, so that you could get a check a few weeks sooner instead of waiting in order to collect an extra $9 or $10 million (not figuring the larger cash value thanks to tonight's rollover)?

                          ArizonaDream's avatar - Lottery-009.jpg

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                          October 10, 2015
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                          Posted: November 17, 2016, 7:37 am - IP Logged

                          If congress does pass a change, lets say in May, when do those new rates go into effect? I thought it would be for 2018?

                          The IRS already announced 2017 rates 

                          http://www.forbes.com/sites/kellyphillipserb/2016/10/25/irs-announces-2017-tax-rates-standard-deductions-exemption-amounts-and-more/#3dd4585e387a

                          Can those rates still be changed?

                            Unluckyone's avatar - lib

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                            Posted: November 17, 2016, 12:23 pm - IP Logged

                            It looks like Trump's proposed tax brackets have 33% as the top rate for federal income tax. If you won a big jackpot would you wait until 2017 to claim your winnings hoping to only pay 33% instead of 39.6%?

                            I would definitely wait. If any of us were to win, it would belate December before the wire transfer even makes it into our bank account. I am willing to wait a few extra weeks in hopes of changes in our tax laws as well as not owing any additional taxes until 2018.

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                              United States
                              Member #135804
                              November 29, 2012
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                              Posted: November 17, 2016, 2:03 pm - IP Logged

                              They can do it retroactively to cover the year.