re: 765 Million up for grabs this week in the State's top lotteries

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Like I said, chill out

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Oh, so sorry I didn't listen to you the first time you said it.

I guess after being a member of this board for over 14 years and having under 3,000 posts I don't like to waste time with frivolous posts from me or others.

Unlike you, who have bee a member for a month and will have more posts than me in a couple more months. You apparently have a lot more time for this than I do. AND have NEVER told someone they were wrong about anything in a post?

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I guess after being a member of this board for over 14 years and having under 3,000 posts I don't like to waste time with frivolous posts from me or others.

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It's a thread about winning the fricking lottery, but you don't have time for frivolous posts?

Are you kidding me?



Oh yea, chill out.

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You sure about that one chief

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You want to put some money on it? There is no way to have a tax liability before the earnings occur. You do realize what getting the annuity payments entail, right?

And some more

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And what if you die? If you take the annuity and pass away before 30 years are up, you’ll never get the whole amount, because, well, you’ll be dead. Sure, the Powerball will continue to pay the annuity to your heirs (who will have to pay estate taxes), but you personally won’t get to use it. Maybe that matters to you.

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LINK

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The executor paid the additional
estate tax and filed for a refund, arguing that the IRS tables do not value lottery annuities
accurately. The District Court agreed with the estate’s position.

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Okay, you are obviously as clueless as the "where you buy the ticket" guy. Or maybe you are that guy. I don't have time to discuss this with clueless people. If you look at the bolded portion (the text that is darker than the rest) of your quote above you will see (probably not understand) but see that your post proves my point. Thanks for playing.

(E)state is the beneficiary, not the IRS or the state. Jeez man !!!

This one can't make it any clearer:

LINK

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Example: Ann won the lottery on 10/31/94 and became entitled to 20 annual payments of $1 million each, payable on October 31 of each year. After receiving the first five payments, Ann died on 11/1/98. Under Sections 2031, 2039 , and 7520 , Ann's estate is required to include the present value of the remaining 15 annuity payments, calculated to be $10,104,600. 36

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Inclusion and Valuation Principles
When a lottery winner dies, the value of the remaining portion of a lump-sum payment received by the lottery winner, to the extent it has not been spent or given away during lifetime in the form of nontaxable gifts, is subject to inclusion in the lottery winner's gross estate. Similarly, for lottery winners receiving payments as an annuity, the present value of the unpaid annuity payments is included in the lottery winner's gross estate. 34

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Taxpayers have argued that lottery rules which prohibit or limit the assignability of the remaining annuity payments cause the annuity to be a restricted beneficial interest, thereby permitting a departure from the requirements of Section 7520. In TAM 9616004 , the IRS rejected this argument, however, noting that Reg. 20.7520-3(b)(2) discusses restrictions and limitations on payment, as opposed to assignability, of the annuity. Because there is no restriction on the payment of the lottery prize annuity, the taxpayer is required to use the standard Section 7520 annuity factors.

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You're a hypocrite

LINK

New York Times agrees with you too, citing the powerball website:

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On the other hand, there is a potential tax disadvantage with the annuity. If you die before it’s finished paying out, you can leave the future payments to your heirs, but the I.R.S. will want to collect estate tax right away on those payments’ future value. If you die shortly after getting the prize, you won’t have nearly enough cash on hand to satisfy the taxes due.

Powerball’s website proposes a simple solution to this: If you die, Powerball can convert your annuity into a cash lump sum, so you can pay estate tax. However, it can only do that if it’s legal in the state where you bought the ticket. Texas, for example, has a law authorizing such conversions; New York does not. If your state won’t allow it, and you have reason to believe your life expectancy may be short, that is a strong argument for taking the lump sum.

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Powerball website:

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he estate will handle the lottery prize. A lottery annuity prize is just like any other asset. You can pass any remaining annuity payments on to your heirs or to anyone else. The Powerball game will even cash out an annuity prize for an estate. This may make it easier for the estate to distribute the prize. It also may be necessary to cash out the annuity to pay Federal estate taxes. We will sell some or all of the securities at competitive bid or will even just transfer the securities to the estate. We do not charge a fee of any kind. We often hear people complain that the jackpot should not go back to "the state" when a winner dies. It does not. I think that this misunderstanding may come from the response that the prize "goes to the Estate" and some people hear "goes to the State."

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LINK

Pretty cool of them to do that actually. I wasn't aware they operated like that.



Estates really end up in a bind when illiquid assets like land and buildings are part of the estate and proper planning is not done

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bullshite, it would be determined based upon your residence when the money was paid out.

"Of the 43 states that participate in multistate lotteries, only Arizona and Maryland tax the winnings of nonresidents."

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First of all, You obviously take the lottery pretty seriously.

Secondly, since you have already been proven wrong on one part, let's help you bat 1.000.

Louisiana sees all gambling profits won in the state as Louisiana sourced income and on amounts over $5,000 you will be taxed automatically when you go to claim.

Even with an annuity it doesn't matter what state you live in afterwards because the income was claimed in Louisiana. They will W2G you every year.

But yeah, you should continue flying off the handle about something this stupid and keep quoting old thenest.com articles as "proof".