Powerball queston

[FANOFJESUS]

I heard a lady on tv say you could buy a ticket then if you won move before claiming it to a tax free state. Would this work?

 

[MasterBlaster]

I heard a lady on tv say you could buy a ticket then if you won move before claiming it to a tax free state. Would this work?

In general (with a few exceptions), money is taxed where earned. Therefore you would have an uphill battle to establish residence somewhere other than where you lived when you bought the ticket. In my opinion it wouldn't work.

If you took the annuity then perhaps you can make the case each year that your new residence is where the money should be taxed (or not).

States can get pretty aggressive about taxation. However the courts have rules that pensions (for example) are not taxable where earned but are taxable where your residence is.

- Good luck with your new earnings. How does one spend a billion in one lifetime ?

 

[dtbach]

Hey, it's a "lady on TV" it must be true.

 

[FANOFJESUS]

Hey, it's a "lady on TV" it must be true.

I should have said news lady. It just sounds to good to be true.

 

[braumeister]

Some guy on the internet thinks the news lady is mistaken.

From the Powerball website:

You do NOT have to cash the ticket at the same store, but you do have to cash the ticket in the same state.

 

[Sunset]

I've already started packing to move, calling the movers so they can show up Thursday.

After 6 months in FL, I'll phone in and collect my Billion

 

[mickeyd]

Buy a Powerball ticket? Not me. I got folks offering them for free. Can you beat that?

Come in today and tomorrow for a FREE
Powerball lottery ticket when you get your oil changed! Don't miss out on your
chance for 1.5 BILLION dollars!!

 

[papadad111]

Marketing is a beautiful thing. I tipped my server the other day and added in a single drawing ticket for the big powerball. Ya never know. If she wins hopefully she remembers me ....

 

[GalaxyBoy]

Err, make that one in 300 million.

 

[Al in Ohio]

Hey, it's a "lady on TV" it must be true.

I'd be more certain if it was "a lady on ask.com"


Sent from my iPhone using Early Retirement Forum

 

[pb4uski]

Actually it has me thinking... we are currently in FL which has no state income tax and I bought the ticket here and will be here Wednesday when the drawing occurs... so if I am a cash basis taxpayer and formally change residence before I cash the ticket, could I effectively avoid state income taxes in my home state?

 

[GravitySucks]

I had a winning MegaMillion ticket purchased in NY. The convenience store clerk in Wyoming wouldn't cash it. And he's a professional.

I had to wait till after my journey to collect my $3.


Sent from my iPhone using Early Retirement Forum

 

[Texas Proud]

State income taxes are a strange animal... many states with many different laws...


From my small knowledge, income is NOT taxed where earned per se...

I knew people who lived in NY and did a good amount of work in Texas... and NY taxed them on all income...

Now, for awhile I lived in NY, worked in NJ but had residence in Texas... I had to pay (really, it was my company) taxes in NJ and NY since Texas has no income tax... so, even though all my income was from work in NJ I still had to pay NY state and NYC city taxes with a deduction for what was paid in NJ....

The states will tax you if they can, but usually give you a break on taxes that were paid to another state... so residence does matter.

 

[FireBug]

Ok, a $2 investment returns 1.5 BILLION DOLLARS, and we're talking about saving on taxes?

 

[Texas Proud]

Ok, a $2 investment returns 1.5 BILLION DOLLARS, and we're talking about saving on taxes?

First, if cash value it is less... say $900 million....


But, at a 5% state tax rate (not out of the question) you are going to pay $45 MILLION in taxes just to the state...


Yep, I would be talking about saving on taxes.... it is not an issue with me, but if it were I would be looking to find a way to pay a lot less than $45 mill....

 

[ChiliPepr]

a lot of your tax questions are answered in this article from MarketWatch.

But they do say this:

can you move to Florida or Nevada or Texas, which have no personal income taxes, and thereby avoid any state income tax hit on your future lottery annuity payments? It depends on the laws of the state where you currently reside. This is a question to be researched by your newly hired tax professional (more on that later).

 

[RunningBum]

First, if cash value it is less... say $900 million....


But, at a 5% state tax rate (not out of the question) you are going to pay $45 MILLION in taxes just to the state...


Yep, I would be talking about saving on taxes.... it is not an issue with me, but if it were I would be looking to find a way to pay a lot less than $45 mill....

You're still going to have roughly $500M. You're saying that's not enough, so you're going to disrupt your life even further to make it $545M? What are you going to do with $545M that you can't do with $500M?

 

[utrecht]

You're still going to have roughly $500M. You're saying that's not enough, so you're going to disrupt your life even further to make it $545M? What are you going to do with $545M that you can't do with $500M?

Give $45 million to my favorite charity (which is not the government) and still have my $500 million?

Thats a joke. This a fairly stupid thread IMHO.

 

[wrigley]

Ok, a $2 investment returns 1.5 BILLION DOLLARS, and we're talking about saving on taxes?

I was thinking the same thing.

A single winning ticket is worth about $940 million after taxes.

Mike