At the nearly impossible possibility of winning, I bought enough tickets to cover all my employees. Posted copies of them and promised to split the winnings evenly with everyone on the payroll if any ticket wins the jackpot. If we win, every employee becomes an instant multimillionaire after I hire a dozen lawyers to figures out how to do that, and then my company falls apart, which would probably make the whole thing a break even for me at best. I'm not sure I want to win.
Here's a question: If I won, I'd pay about half in taxes, then if I gave the remainder away to my employees I assume they would be charged about half again in taxes, leaving us with only 1/4 of the prize. Is that right? Is there a way around that?
You can gift $14,000 each year to any person you want without incurring a gift tax return on your part (Gift tax exemption for the 14K to you). Gifts are tax free to the recipient. "Gifts you receive aren’t considered income. It doesn’t matter how large they are. You don’t report them on your income tax return in any way."
If you give more than $14,000 to that person the amount over that will be applied toward your lifetime taxable gifts and you file a gift tax return. I believe the lifetime amount is over 5 million dollars for you and if you have a spouse the amount is doubled. The gift taxes that you are liable for over the lifetime amount is paid by your estate. You don't have to pay gift taxes yet.
So you can give everyone a million dollars and they don't pay taxes. You will eventually pay gift taxes, but not right now.
Trusts and other vehicles can be used to reduce your taxable estate.
You can give that $14k to as many people each, each year as well.
If you were to win the big moola, the first thing you should do BEFORE claiming the money is to hire a good attorney, a good qualified financial planner and a CPA and probably a security firm to keep the low lifes away from your door.
Set up trusts!! Charitable remainder and/or Charitable Lead Trusts. Personal Trusts. Irrevocable trusts. All depending on what your goals are. Personally, I would also set up some 501-c-3 foundations that I could put some funds into.....receive a nice tax deduction against future income from the portfolio that your winnings are generating. There are also current tax breaks for certain types of charitable deductions. Bonus on the charitable foundations, you can position people you like, family etc as paid administrators of the foundations.
Lots of ways around it :-)
Get all your ducks in a row BEFORE taking possession of the money. You don't even have to pay me for this free advice.......just get a good advisory firm to do the work. Hope you win! If I don't win that is.
Sure the lottery is a stupid bet, but here's the thing:
1) Two dollars has a chance - however slight - of making you one of the richest people in history, and do it right now with no work and no time invested. You could do everything you ever wanted, and do the same for everyone you know or care about, and you could solve endless serious problems that you care about. Even an astronomical possibility at that is worth two bucks to avoid having absolutely no chance at it.
2) Every person who ever won the lottery knows someone who told them how stupid it was to play, and they were of course right, but that is one incredibly painful wisdom to posses if you are that guy, but hey you WERE right.
I play the lottery when it gets really big, but I only feel the need to play one ticket, because the difference between one chance in millions and no chance at all is infinity, and that's a really a big number.
Thanks DBQ. I hope I need the advice. If I won, my employees will each get about $15 million before taxes, and dozens of families will be severely challenged.
This is so big a number that whoever wins is likely to become an iconic cautionary tale of the dangers of money. When you start thinking about what kind of people are out there with a possibility of winning, how much money this is, and the endless ways it could be used, it brings to mind a lot of fascinating, wonderful and terrifying scenarios. What if the winner is some guy who thinks ISIS is just awesome, someone with a marginal I.Q., or someone who wants to overthrow the government. There should be background checks for this.
Another thing to consider Bago.....is that some people do not do well if they are suddenly given a huge or substantial amount of money. They don't have the skills or discipline. Often they can become prey to unethical people, greedy relatives, broke within a few years, even murdered. In many cases of big lottery winners it doesn't turn out well at all.
I've seen some very sad cases when my clients had passed and their child or children inherited some quite large sums of money and assets where the kids just couldn't handle it. They fought with each other or went through their inheritances in just a very short time. Squandering all the years of their parent's sacrifices. Ended up on drugs. Lost everything.
The parents would have been wiser to set up an irrevocable spendthrift type of trust to provide a comfortable life time income and where the principle could not be squandered, stolen or wasted away. Some of my clients actually took this advice. It is a very touch subject and one that parent's don't really like to face.
Think of this IF you win and what the consequences might be to your individual employees. Can they handle it?
"Think of this IF you win and what the consequences might be to your individual employees. Can they handle it?"
I know, but could you imagine telling some of my employees that they don't get the same millions as others because I don't think they can handle it? I don't want a hammer to the back of my head. I really hope I don't win. It's quite possible that if I won $1.5 billion that I would instantly be worse off financially and otherwise. Only MY girlfriend could come up with an idea that would make that possible. She is amazing like that. Never take advice from a blond. Wait, DBQ, aren't you a blond?
I have decided I will keep ten percent, give ten percent to charity and split the rest evenly with 25 close friends and relatives and another 15 chosen at random. Random means it could even be a few of you guys.
It will be interesting to see which my winners self-destruct in the next 10-20 years even after I have given them $10 Million or so. I view it as a big social experiment - which ones will be broke before they croak? I hope I live long enough to find out!
I was curious about Ed's grandpa, just yesterday, the original "good time charlie" (wikipedia confirms, but images does not have a photo of him in his raccoon and spats that really shows what that means) and the house they show is not Montana House on Long Island. Then I realized I had just conflated his dad, both Charles. This is the guy whose gift from me Ed took credit for because his dad said when he gave it to him following a long pause, " ... none of my children ever gave me a valentine present before." It had nothing to do with Valentines, I just happened to know he liked toffy and Endstorm's in town is the best, and it just happened to be Valentine's that he passed it along. Ha ha. From my pov not a loss, rather, two wins in one. They just had a huge fight a the dinner table, his fist sister was ugly and his dad withdrew to his room.
That's the thing about genuine re-gifting, it's two actual genuine gifts in one object, like money multiplier effect. The exact same thing 'cept differn't. This is an economic truth.
So Good Time Charlie does the work but Charles wins the lottery. But their story is sad.
In my circle, Ed and his twin are the wealthiest people around and honestly spending time with him anymore is a complete pain in the ass. It's not possible to have lunch anywhere without fifteen interruptions especially in San Francisco where he lives now. Ed and Doug drip, you can hear in both their speech patterns, to some both their manners are so off-putting that it drives people away, but it's real. That really is them. That is their sincere speech, both of them really are always sincere, I've never seen otherwise, then to another very large group of people it's attractive and intrusively so. But I must admit both of them can be obnoxious as hell without trying. This group behave toward the twins and their sisters as if they've won the lottery.
All of them are imagining that all that Merrill/Lynch wealth redounded but only a tiny part did and does. Everything, the bulk went to charity and still does, and all that is seen is the tiny portion of unbreakable trust made early in childhood Ed's dad. That's the extraordinary thing. I sort of viewed them as greed personified but the opposite is true, their humility is what is showing and not at all anything like opulent avarice. Then, from those early trust really ARE tremendous unthinkable wealth and the bulk of all that goes to charity. This is Ed's dad.
His dad went to work in a helicopter. It was hijacked one day in New York. Made the news. It was a big dealio.
From c/p from wikipedia, this surprised me
Despite great personal wealth derived from an unbreakable trust made early in his childhood, Merrill lived modestly.[1] Before his father's death, Merrill and his two siblings renounced any further inheritance from their father's estate in exchange for $100 "as full quittance";[2] as a result, much of Charles Merrill Sr.'s estate was donated to his namesake trust.
Modestly. The family house is like Versailles. The front yard is twice the length of Washington Park in Denver. I told Ed I feel sorry for his gardener and Ed goes, "you idiot, he has a crew." That's good because Ed made the guy drive him around.
It's just money, what the hay stack, just numbers. There is a sense of deep humility running through generations where most of it goes toward philanthropy and the least of it kept for family and themselves. And it's not all cynical tax evasion. They don't buy new cars every year, but the oddest damn thing, when Ed buys a house in San Francisco, it's ordered as if buying a pizza. By phone. I went there. The place is a mess. Smack in the center of activity and a complete mess. And you can't get contractors. I bet the place STILL isn't done.
I have no problem with it. And it makes perfect sense. People think taxes are theft and a waste, and the state needs money. Might as well take advantage of American gullibility this way. I'm telling you they must have raised a goddamn fortune today on all this shit. And why? Because, if you're willing to believe in the American dream as fervently as everyone does, then you're willing to believe the state can make you a billionaire. Why does America love its billionaires with such masturbatory abandon? Because each of you actually think that you can become one. This is simply the American taxation and wealth ethic implemented in an improved format.
Keep it going long enough and eventually raise the stakes to ten billion, and then 100 billion. Eventually the revenue from those payout promises will surpass enough budgets to last twenty lifetimes. Income tax will be replaced entirely by gambling at the government's corner store casino.
Eventually the revenue from those payout promises will surpass enough budgets to last twenty lifetimes. Income tax will be replaced entirely by gambling at the government's corner store casino.
So true. The winner already only gets about 30-40 cents on the dollar and the government gets 10s of billions from lottery sales.
It buys two dollars worth of fantasies. I'm just glad I never won the bad luck lottery. Cabs are always skipping the curb, and innocent bystanders get mowed down in gangland shootings. Count your blessings.......I knew one guy who won--sort of--the lottery. It wasn't a huge win--if I remember it was $32,000. Every week after that he bought more lottery tickets than he could afford. I'm pretty sure he gave all the money back within five years.........A lot of people are compulsive gamblers but just don't know it. In order to trigger the addiction, you need a big win. No big win, no compulsion.......I suppose one of the blessings I can count is that I never had a big night at the tables. I did get to live through a real estate and stock market boom so that counts as good luck. ......The people who fuck up their lives by winning a million dollars or more were probably going to fuck up their lives by other means. A million dollars solves quite a few problems.
Ah well.....I didn't win. I didn't expect to either. As I said. Buying a ticket (we bought a $10 quick pick) is like buying a day dream. Buying the right to fantasize on what you would do IF you won. Ten bucks....big deal. Day dreaming priceless.
@ Bago.....I'm an auburn/dark reddish hair...not blonde. You can safely take my advice.
:-)
We go to Reno quite often. Not for the gambling but more for the car shows (Hot August Nites), BBQ competitions (good food!) and just to get away. While there my husband will buy some Keno tickets with some number that he likes. I buy some and make random patterns because I don't believe in favorite numbers. Then we put them in our wallets, go out and enjoy the day, see the cars, go for a drive around the area, visit the antique stores, buy cool stuff, eat dinner, go to bed and check the tickets in the morning. If we break even...woo hoo. If we win, and quite often we do, we pocket the rest and leave.
Gambling is not fun if you just sit in a dank casino and concentrate on drinking and gambling. That is just tedious and really boring.
32 comments:
At the nearly impossible possibility of winning, I bought enough tickets to cover all my employees. Posted copies of them and promised to split the winnings evenly with everyone on the payroll if any ticket wins the jackpot. If we win, every employee becomes an instant multimillionaire after I hire a dozen lawyers to figures out how to do that, and then my company falls apart, which would probably make the whole thing a break even for me at best. I'm not sure I want to win.
Here's a question: If I won, I'd pay about half in taxes, then if I gave the remainder away to my employees I assume they would be charged about half again in taxes, leaving us with only 1/4 of the prize. Is that right? Is there a way around that?
Yes....lot's of ways around it.
You can gift $14,000 each year to any person you want without incurring a gift tax return on your part (Gift tax exemption for the 14K to you). Gifts are tax free to the recipient. "Gifts you receive aren’t considered income. It doesn’t matter how large they are. You don’t report them on your income tax return in any way."
If you give more than $14,000 to that person the amount over that will be applied toward your lifetime taxable gifts and you file a gift tax return. I believe the lifetime amount is over 5 million dollars for you and if you have a spouse the amount is doubled. The gift taxes that you are liable for over the lifetime amount is paid by your estate. You don't have to pay gift taxes yet.
So you can give everyone a million dollars and they don't pay taxes. You will eventually pay gift taxes, but not right now.
Trusts and other vehicles can be used to reduce your taxable estate.
You can give that $14k to as many people each, each year as well.
If you were to win the big moola, the first thing you should do BEFORE claiming the money is to hire a good attorney, a good qualified financial planner and a CPA and probably a security firm to keep the low lifes away from your door.
Set up trusts!! Charitable remainder and/or Charitable Lead Trusts. Personal Trusts. Irrevocable trusts. All depending on what your goals are. Personally, I would also set up some 501-c-3 foundations that I could put some funds into.....receive a nice tax deduction against future income from the portfolio that your winnings are generating. There are also current tax breaks for certain types of charitable deductions. Bonus on the charitable foundations, you can position people you like, family etc as paid administrators of the foundations.
Lots of ways around it :-)
Get all your ducks in a row BEFORE taking possession of the money. You don't even have to pay me for this free advice.......just get a good advisory firm to do the work. Hope you win! If I don't win that is.
Sure the lottery is a stupid bet, but here's the thing:
1) Two dollars has a chance - however slight - of making you one of the richest people in history, and do it right now with no work and no time invested. You could do everything you ever wanted, and do the same for everyone you know or care about, and you could solve endless serious problems that you care about. Even an astronomical possibility at that is worth two bucks to avoid having absolutely no chance at it.
2) Every person who ever won the lottery knows someone who told them how stupid it was to play, and they were of course right, but that is one incredibly painful wisdom to posses if you are that guy, but hey you WERE right.
I play the lottery when it gets really big, but I only feel the need to play one ticket, because the difference between one chance in millions and no chance at all is infinity, and that's a really a big number.
It's funny, the odds are soooo bad, but I'm going to buy a ticket. Someone has to win someday. I'd have so much fun giving the money away.
PS thanks for the free advice DBQ!
@ Deborah
Right. Someone has to win...eventually, and you can't win if you don't buy a ticket.
We look at it as buying the right to dream or fantasize about what we could/might/should do if we won. Buying a daydream.
I usually don't do this, but here is the winning #s --
11 10 46 17 3
Thanks DBQ. I hope I need the advice. If I won, my employees will each get about $15 million before taxes, and dozens of families will be severely challenged.
This is so big a number that whoever wins is likely to become an iconic cautionary tale of the dangers of money. When you start thinking about what kind of people are out there with a possibility of winning, how much money this is, and the endless ways it could be used, it brings to mind a lot of fascinating, wonderful and terrifying scenarios. What if the winner is some guy who thinks ISIS is just awesome, someone with a marginal I.Q., or someone who wants to overthrow the government. There should be background checks for this.
Ironically, they don't sell Powerball Tix in Nevada. The lines of Nevadans in neighboring states are long.
AllenS, You didn't include the Powerball #.
lol Allen, you forgot something.
DBQ will you come out of retirement to manage my money :)
Another thing to consider Bago.....is that some people do not do well if they are suddenly given a huge or substantial amount of money. They don't have the skills or discipline. Often they can become prey to unethical people, greedy relatives, broke within a few years, even murdered. In many cases of big lottery winners it doesn't turn out well at all.
I've seen some very sad cases when my clients had passed and their child or children inherited some quite large sums of money and assets where the kids just couldn't handle it. They fought with each other or went through their inheritances in just a very short time. Squandering all the years of their parent's sacrifices. Ended up on drugs. Lost everything.
The parents would have been wiser to set up an irrevocable spendthrift type of trust to provide a comfortable life time income and where the principle could not be squandered, stolen or wasted away. Some of my clients actually took this advice. It is a very touch subject and one that parent's don't really like to face.
Think of this IF you win and what the consequences might be to your individual employees. Can they handle it?
Just sayin'
Very good advice DBQ.
If I won I think I would do some Uber driving to keep me from loosing it.
"Think of this IF you win and what the consequences might be to your individual employees. Can they handle it?"
I know, but could you imagine telling some of my employees that they don't get the same millions as others because I don't think they can handle it? I don't want a hammer to the back of my head. I really hope I don't win. It's quite possible that if I won $1.5 billion that I would instantly be worse off financially and otherwise. Only MY girlfriend could come up with an idea that would make that possible. She is amazing like that. Never take advice from a blond. Wait, DBQ, aren't you a blond?
I have decided I will keep ten percent, give ten percent to charity and split the rest evenly with 25 close friends and relatives and another 15 chosen at random. Random means it could even be a few of you guys.
Sound like a good plan to you guys?
DBQ - you pointed out a a feature to my plan.
It will be interesting to see which my winners self-destruct in the next 10-20 years even after I have given them $10 Million or so. I view it as a big social experiment - which ones will be broke before they croak? I hope I live long enough to find out!
Sorry, about the winning extra #. I don't buy tickets for myself. So, you come up with the other #, and win!
The only times that I have ever bought lottery tickets, is when I'm invited to a wedding, and I usually buy $20 worth for the gift, plus the card.
Computer generated, and nobody has ever won.
Remember -- if you win no matter what else you do DON'T TOUCH THE PRINCIPAL!
AJ - sounds like a great plan to me, buddy.
Can I come over and wash your car?
It's fixed. Hillary is going to win so she can fund her campaign.
With Bern on her tail she's going to need it.
Talk about hitting the lottery.
I was curious about Ed's grandpa, just yesterday, the original "good time charlie" (wikipedia confirms, but images does not have a photo of him in his raccoon and spats that really shows what that means) and the house they show is not Montana House on Long Island. Then I realized I had just conflated his dad, both Charles. This is the guy whose gift from me Ed took credit for because his dad said when he gave it to him following a long pause, " ... none of my children ever gave me a valentine present before." It had nothing to do with Valentines, I just happened to know he liked toffy and Endstorm's in town is the best, and it just happened to be Valentine's that he passed it along. Ha ha. From my pov not a loss, rather, two wins in one. They just had a huge fight a the dinner table, his fist sister was ugly and his dad withdrew to his room.
That's the thing about genuine re-gifting, it's two actual genuine gifts in one object, like money multiplier effect. The exact same thing 'cept differn't. This is an economic truth.
So Good Time Charlie does the work but Charles wins the lottery. But their story is sad.
In my circle, Ed and his twin are the wealthiest people around and honestly spending time with him anymore is a complete pain in the ass. It's not possible to have lunch anywhere without fifteen interruptions especially in San Francisco where he lives now. Ed and Doug drip, you can hear in both their speech patterns, to some both their manners are so off-putting that it drives people away, but it's real. That really is them. That is their sincere speech, both of them really are always sincere, I've never seen otherwise, then to another very large group of people it's attractive and intrusively so. But I must admit both of them can be obnoxious as hell without trying. This group behave toward the twins and their sisters as if they've won the lottery.
All of them are imagining that all that Merrill/Lynch wealth redounded but only a tiny part did and does. Everything, the bulk went to charity and still does, and all that is seen is the tiny portion of unbreakable trust made early in childhood Ed's dad. That's the extraordinary thing. I sort of viewed them as greed personified but the opposite is true, their humility is what is showing and not at all anything like opulent avarice. Then, from those early trust really ARE tremendous unthinkable wealth and the bulk of all that goes to charity. This is Ed's dad.
His dad went to work in a helicopter. It was hijacked one day in New York. Made the news. It was a big dealio.
From c/p from wikipedia, this surprised me
Despite great personal wealth derived from an unbreakable trust made early in his childhood, Merrill lived modestly.[1] Before his father's death, Merrill and his two siblings renounced any further inheritance from their father's estate in exchange for $100 "as full quittance";[2] as a result, much of Charles Merrill Sr.'s estate was donated to his namesake trust.
Modestly. The family house is like Versailles. The front yard is twice the length of Washington Park in Denver. I told Ed I feel sorry for his gardener and Ed goes, "you idiot, he has a crew." That's good because Ed made the guy drive him around.
It's just money, what the hay stack, just numbers. There is a sense of deep humility running through generations where most of it goes toward philanthropy and the least of it kept for family and themselves. And it's not all cynical tax evasion. They don't buy new cars every year, but the oddest damn thing, when Ed buys a house in San Francisco, it's ordered as if buying a pizza. By phone. I went there. The place is a mess. Smack in the center of activity and a complete mess. And you can't get contractors. I bet the place STILL isn't done.
She's giddy about the prospect.
I have no problem with it. And it makes perfect sense. People think taxes are theft and a waste, and the state needs money. Might as well take advantage of American gullibility this way. I'm telling you they must have raised a goddamn fortune today on all this shit. And why? Because, if you're willing to believe in the American dream as fervently as everyone does, then you're willing to believe the state can make you a billionaire. Why does America love its billionaires with such masturbatory abandon? Because each of you actually think that you can become one. This is simply the American taxation and wealth ethic implemented in an improved format.
Keep it going long enough and eventually raise the stakes to ten billion, and then 100 billion. Eventually the revenue from those payout promises will surpass enough budgets to last twenty lifetimes. Income tax will be replaced entirely by gambling at the government's corner store casino.
It will happen.
Who wants to bet it's rigged to go back to DC?
I'll bet you 100 bucks someone in DC wins. and we will never know who.
If hiilary wins, she can manufacture some big crowds. Think of the fancy state of the art photoshop & mannequins you can buy with half a billion.
Eventually the revenue from those payout promises will surpass enough budgets to last twenty lifetimes. Income tax will be replaced entirely by gambling at the government's corner store casino.
So true. The winner already only gets about 30-40 cents on the dollar and the government gets 10s of billions from lottery sales.
Why not auction off that trillion dollar coin?
$200 in = $15 back
Whew!, Close one.
It buys two dollars worth of fantasies. I'm just glad I never won the bad luck lottery. Cabs are always skipping the curb, and innocent bystanders get mowed down in gangland shootings. Count your blessings.......I knew one guy who won--sort of--the lottery. It wasn't a huge win--if I remember it was $32,000. Every week after that he bought more lottery tickets than he could afford. I'm pretty sure he gave all the money back within five years.........A lot of people are compulsive gamblers but just don't know it. In order to trigger the addiction, you need a big win. No big win, no compulsion.......I suppose one of the blessings I can count is that I never had a big night at the tables. I did get to live through a real estate and stock market boom so that counts as good luck. ......The people who fuck up their lives by winning a million dollars or more were probably going to fuck up their lives by other means. A million dollars solves quite a few problems.
Ah well.....I didn't win. I didn't expect to either. As I said. Buying a ticket (we bought a $10 quick pick) is like buying a day dream. Buying the right to fantasize on what you would do IF you won. Ten bucks....big deal. Day dreaming priceless.
@ Bago.....I'm an auburn/dark reddish hair...not blonde. You can safely take my advice.
:-)
We go to Reno quite often. Not for the gambling but more for the car shows (Hot August Nites), BBQ competitions (good food!) and just to get away. While there my husband will buy some Keno tickets with some number that he likes. I buy some and make random patterns because I don't believe in favorite numbers. Then we put them in our wallets, go out and enjoy the day, see the cars, go for a drive around the area, visit the antique stores, buy cool stuff, eat dinner, go to bed and check the tickets in the morning. If we break even...woo hoo. If we win, and quite often we do, we pocket the rest and leave.
Gambling is not fun if you just sit in a dank casino and concentrate on drinking and gambling. That is just tedious and really boring.
Odds are you're more likely to be killed by a vending machine.
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