Powerball Jackpot

[The Mystery Machine]

Don't want to hijack but I'm sorry about your diagnosis! I will be thinking of you in the days ahead. Take care of yourself Mystery Machine

Thanks.

 

[Dentam]

First step - call everyone you know & ask to borrow $1,000. After they all say "no" it will make it much more awkward for them to come begging once they realize YOU have money

Genius plan - I like it!

 

[lovin'fl]

DH says we'd take the annuity. He'd quit work. We'd donate a lot. We'd get a nice place somewhere warm...DH says FL but I'd consider the Caribbean somewhere. I like Grand Turk. I too have a house to get on the market, plan is to list in about a year. I wouldn't care anymore about how to sell it for a bit more than what we owe on it (we bought in 2007 right at beginning of housing market crash and we owe about what we could list it for but then would have to bring $$ to table due to realtor commissions and whatnot). We could give it away if we won Powerball. Might finish renovating (we have already done a lot) and then rent it out. Also own condo in NC that needs renovating...could do that and rent it too. Or we could just dump them both.

MM-

 

[punkin]

Shah...it's nice to dream. First: college tuition. Second: healthy trust funds for the niece and nephews. Third: I'd like to sell the house, but that would have to wait a year. Fourth: buy a NICE house closer to hubby's work (no. He wouldn't quit). Fifth: buy a pied a terre in Manhattan. Invest everything else and live off the interest.

 

[rajak73]

Yes, I'm going to keep working......No I'm not, I just won 1.5 billion dollars.

 

[RedAngie]

Why buy a ticket now & only now?

Well, because even though I enjoy dreaming about winning the lottery, I don't enjoy it enough to go out of my way to buy a ticket EVERY drawing. So, if I'm only going to buy one "on occasion", I won't find a better occasion than now.

Same. I only pay attention when it becomes newsworthy. Many people and the media are jaded about the lottery until it reaches astronomical jackpots. Only a small percent of the population plays regularly.

First step - call everyone you know & ask to borrow $1,000. After they all say "no" it will make it much more awkward for them to come begging once they realize YOU have money

Good idea in theory, but I'm sure those leeches will get over any awkwardness very quickly, like 1 millisecond.

Shah...it's nice to dream. First: college tuition. Second: healthy trust funds for the niece and nephews. Third: I'd like to sell the house, but that would have to wait a year. Fourth: buy a NICE house closer to hubby's work (no. He wouldn't quit). Fifth: buy a pied a terre in Manhattan. Invest everything else and live off the interest.

Definitely a pied a terre in NYC. Probably one in LA too. And a beachfront house/condo.

 

[punkin]

Ohhh, and a music room in each home with a Yamaha baby grand and space for DDs' instruments.

 

[Shutterbug]

I just might buy the world two cokes but I am going hire someone to teach them to sing in perfect harmony.

 

[bcla]

My head hurts now....


If any of us/you win, consult a tax professional (amongst others) and they will make sure all is well in the land of taxes.

And you call yourself "TAX GUY"? It's pretty simple. The feds take 25% right off the top if the winner provides a SSN. It's 28% if they don't. The winner probably owes more taxes than the withholding, but that will be taken care of at tax time.

 

[bcla]

Oh wow I had no idea there were states with no lottery!

Nevada already has legalized gambling, and they don't want the competition for private casinos. I heard that there are huge lines at Primm, which is technically in Nevada, but right at the border. They sell lottery tickets on their property, but just across the border into California. They're actually buying at a convenience store with the name Primm Valley Lotto Store.

http://www.fox5vegas.com/story/30930999/powerball-is-the-talk-of-the-town-in-primm

Me - I'm just living the fantasy and plunked down $20.

 

[bcla]

One of the reasons people who know math decide to play when the jackpot gets bigger is that at some point the game becomes a +EV (Expected Value). Not going into all of the math, but with the jackpot at 1.3B and with all of the other lower payouts, it is probably safe to say that the game is now +EV. I do understand the chances of winning the jackpot stays the same (very very remote) though. However to put a few unneeded dollars into a +EV game and to be able to dream a little, is worth it to me.

It parimutuel where the formula requires that 50% of the revenue be returned as winnings. However, it's not like horse racing where it's the entire pot, there's generally a guaranteed winner (or 2nd/3rd) in the race and all the proceeds go to the winners. It's the carryover from previous drawings that adds to the pot. Suppose you had $900 million as the last jackpot, and the current one bumps up to $1.6 billion from about $1.6 billion in sales. So the total bets are going to be less than the total payouts - if someone wins. I didn't account for the nature of the jackpot prize as an annuity, but I think most people understand that the carryover of previous pots increases the average predicted payout.

The math is not exactly pleasant, but it gets to the point where the odds are certainly better with the carryover from the previous pots.

California is a bit different than most states in that the payouts for other prizes aren't fixed. The 5 of 5 prize is constantly changing. However, it's likely to be pretty big with so many people buying tickets.

 

[TAX GUY]

And you call yourself "TAX GUY"? It's pretty simple. The feds take 25% right off the top if the winner provides a SSN. It's 28% if they don't. The winner probably owes more taxes than the withholding, but that will be taken care of at tax time.

Thank you. Yes, I'm aware of the process, I was just saying with all the other replies about "withholdings" and "tax liability" and general confusion, it can make one's head start to spin trying to figure out what is what, and deciding what was "heard" is true and/or accurate. Short of getting into explaining it, I was just suggesting that the winner(s) should consult a tax professional, planner, lawyer, etc.

ETA: be careful about the "donations" part. There are certain add backs once AMT kicks in. You are right though in that donations do have a cap, which is typically up to 50% of taxable income but there may be no deduction(s) because of AMT.

 

[pryncess527]

I really hope I wake up to these complex tax problems tomorrow morning

 

[TAX GUY]

I really hope I wake up to these complex tax problems tomorrow morning

Me too! I think it would be one of those good problems to have.

 

[bcla]

All the markets I've passed today have signs reading 999 million for the jackpot - they're not set up to go over that. Six people in CO won 50k to 150k (with power play) last night. Two in Denver. Wish I could say I was one of them!

I noticed that. One store manager got creative.

The California Lottery website now starts with a Powerball overlay. Then the front page says OMG! OMG! OMG! as the first rotating item.

 

[LilyWDW]

What would I do? First I would hire a financial adviser and lawyer so that I know I am protecting myself for a long time to come.

I would then purchase a house of my own and hire people to help me pack, move, and unpack, pay off all of my debts (school loans and the such), take the family to Disney (most likely after buying DVC as an annual Disney trip would be on my to do list lol), get a downtown room for GenCon this year, give some money to my dad to help him out, and take a trip to Vegas with some friends.

 

[GaryDis]

Thank you. Yes, I'm aware of the process, I was just saying with all the other replies about "withholdings" and "tax liability" and general confusion, it can make one's head start to spin trying to figure out what is what, and deciding what was "heard" is true and/or accurate. Short of getting into explaining it, I was just suggesting that the winner(s) should consult a tax professional, planner, lawyer, etc.

ETA: be careful about the "donations" part. There are certain add backs once AMT kicks in. You are right though in that donations do have a cap, which is typically up to 50% of taxable income but there may be no deduction(s) because of AMT.

Charitable contributions aren't added back for AMT. But what will also reduce things is the overall limit on itemized deductions - though only by 3% (if you consider 3% of $900M to be a small reduction).

However, for someone in this tax bracket, AMT is unlikely to apply, because the highest AMT tax bracket is only 28% versus 39.6% for regular income tax. Perhaps in CA or NYC with their very high tax rates (since state income tax isn't deductible for AMT).

 

[Dentam]

I noticed that. One store manager got creative.

The California Lottery website now starts with a Powerball overlay. Then the front page says OMG! OMG! OMG! as the first rotating item.

I LOVE it - ha!

 

[CinderellasKastle]

I hear the estimate is now $800 million annuity, $496 million lump sum payout.

So I'll probably buy $20 worth of tickets, letting the computer pick nine random sets of numbers, then choose 65, 66, 67, 68, and 69 with 26 as the powerball for the 10th ticket. It's as good a method as any other.

Everyone who has liked one of my posts in the past gets a share if I win. Maybe a dollar if I feel generous.

Good luck to anyone who plays.

I bought lottery tickets today - my first time (I'm 27. Woops). It'd be cool to win, or even win 14 dollars just so I can get my money back for not winning. LOL.

 

[Hannahinwonderland]

I really don't know what I'd do. I'd like to think that I'd continue my grad program, as I'm in a field I'm super passionate about. But with all that money; there are so many other things I could do! I know that I would buy a Disney AP in a second and go on a tour of all of the world's Disney parks