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Dividing a Winning Ticket with Family

Topic closed. 4 replies. Last post 13 years ago by Thomas Covenant.

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Lubbock, TX
United States
Member #3063
December 19, 2003
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Posted: December 19, 2003, 3:03 pm - IP Logged

Can a winning ticket holder divide the ticket with his family and/or friends?

    Cleveland,Oh
    United States
    Member #1856
    July 16, 2003
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    Posted: December 21, 2003, 1:57 am - IP Logged
    Quote: Originally posted by Sally Jane on December 19, 2003



    Can a winning ticket holder divide the ticket with his family and/or friends?






    YES. BUT THEY SHOULD BE INCLUDED ON THE WINING TICKET

    (FORM AT TIME OF WINNING) SO THEY CAN ALL SO SHARE IT THE TAX!

    unless you want to give it to them tax free! Or just $ 10,000 each!

      Thomas Covenant's avatar - money
      South Carolina
      United States
      Member #491
      July 16, 2002
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      Posted: December 21, 2003, 3:02 pm - IP Logged

      >>YES. BUT THEY SHOULD BE INCLUDED ON THE WINING TICKET

      (FORM AT TIME OF WINNING) SO THEY CAN ALL SO SHARE IT THE TAX!<<



      Well, yes and no. Lotteries will only pay one person or entity, so in order to avoid having one person paying all the taxes you should start a "Family LP" or "Family LLC".

      Doing a Google search on the words in quotes should give you more info.


      Okay, now I believe you can predict lottery numbers

        megamillionaire's avatar - Sphere animated_small_ neg2.gif
        Queens, NY
        United States
        Member #245
        April 15, 2002
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        Posted: December 21, 2003, 5:15 pm - IP Logged
        Quote: Originally posted by Thomas Covenant on December 21, 2003


        Well, yes and no. Lotteries will only pay one person or entity,


        Not necessarily so Thomas. If several members of a family chip in when buying the ticket the lottery will pay them the percentage owed them and tax them on that portion. There was a recent article in the news forum about a father and daughter who each collected half of a lottery jackpot. Also the twelve or so New York civil service workers collected his or her own share and paid the taxes on said share.

        Megamillionaire

        Time is a wonderful teacher, but it kills all its students.

        A man must consider what a rich realm he leaves when he becomes a conformist.

          Thomas Covenant's avatar - money
          South Carolina
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          July 16, 2002
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          Posted: December 21, 2003, 5:58 pm - IP Logged

          I stand corrected, it varies by state. I stole this from the Powerball website.



          SHARING OF PRIZE; GIFT TAX



          Can the Powerball winner designate additional recipients, such as family members? Roger B. via Compuserve.



          Prize claims are handled by each state lottery that sells the game. State prize claim rules will vary, but states generally prefer to issue one check and withhold taxes for one person. Note, however, that some state lotteries will issue separate checks and withhold amounts for any number of persons that share in a prize.



          Your question seems to suggest that a winner may decide, after winning the jackpot, to share the prize. You should be aware that to avoid the Federal Gift Tax, the persons who are splitting the prize must have agreed to share in the purchase price of the ticket before the win. Most people are not aware of the Gift Tax. When a person dies, the Federal Government collects an Estate Tax (payable by the estate) on the assets of the estate. It would be an easy thing to avoid the Estate Tax by simply giving the property away shortly before death. To close this loophole, the Federal Government also assesses a Gift Tax payable by the person making the gift. If a winner decides to give half of the winnings to a third party, the winner will be charged with a Gift Tax on the half of the prize he or she gives away (at rates up to 55%). In this scenario, the winner is still liable for the income tax on the entire prize.



          Players planning to split a prize should be sure to have evidence of that intention so the IRS will not levy an additional tax for making a gift. There are some minimum amounts that can be given away without incurring the Gift Tax, but Powerball winners can afford to give gifts that can quickly reach the maximum Gift Tax percentage.


          Okay, now I believe you can predict lottery numbers