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Re: $425 million powerball pool
There are gift taxes to worry about. You can't just give someone 20,000,000 (just had to put those zeros in there) and not have a tax consequence later. But I agree with GSXRBots. Don't do anything or tell anyone(if that is possible) until we figure this out.It would be better for all to claim award individually.
Complicated -- that's how the Internal Revenue Service describes the tax code regulating the gift tax. It is often misunderstood because this particular tax burden falls on the person doing the giving, not the person who receives the gift.
The gift tax was created so that taxpayers wouldn't give away all of their wealth while they were alive as a way to avoid estate taxes after they were gone.
The IRS allows an annual gift tax exclusion of $13,000. That means each calendar year you are allowed to give another person $13,000 worth of gifts without paying any extra taxes. There is no limit to the number of individuals you can gift to. If you and your spouse are gifting together, you can make that $26,000 to each individual. The amount of the gifts given beyond those exclusions can be subject to a tax rate between 18 and 35 percent.
There is however, a lifetime gift ceiling. The tax code for 2011 says you can give away $5 million in cash or items during the course of your life before the excess will be subject to the gift tax. That tax rate is 35 percent in 2011.
If you are on the receiving end of a gift, you don't have to report it as income or pay any income taxes on it. Gift taxes are paid by the giver.
If you are giving gifts that exceed the annual exclusion, or you and your spouse have decided to combine your exclusions or you have surpassed your lifetime gift ceiling of $5 million, you will need to report any additional gifts you are giving each year to the IRS using Form 709.
So you see this can get complicated especiall in the amount of 270,000,000. You the giver will have to pay 35% gift tax to the "gifts" you gave us...not good...Individual claims the way to go....and again what a great problem to have.
Eric
There are gift taxes to worry about. You can't just give someone 20,000,000 (just had to put those zeros in there) and not have a tax consequence later. But I agree with GSXRBots. Don't do anything or tell anyone(if that is possible) until we figure this out.It would be better for all to claim award individually.
Complicated -- that's how the Internal Revenue Service describes the tax code regulating the gift tax. It is often misunderstood because this particular tax burden falls on the person doing the giving, not the person who receives the gift.
The gift tax was created so that taxpayers wouldn't give away all of their wealth while they were alive as a way to avoid estate taxes after they were gone.
The IRS allows an annual gift tax exclusion of $13,000. That means each calendar year you are allowed to give another person $13,000 worth of gifts without paying any extra taxes. There is no limit to the number of individuals you can gift to. If you and your spouse are gifting together, you can make that $26,000 to each individual. The amount of the gifts given beyond those exclusions can be subject to a tax rate between 18 and 35 percent.
There is however, a lifetime gift ceiling. The tax code for 2011 says you can give away $5 million in cash or items during the course of your life before the excess will be subject to the gift tax. That tax rate is 35 percent in 2011.
If you are on the receiving end of a gift, you don't have to report it as income or pay any income taxes on it. Gift taxes are paid by the giver.
If you are giving gifts that exceed the annual exclusion, or you and your spouse have decided to combine your exclusions or you have surpassed your lifetime gift ceiling of $5 million, you will need to report any additional gifts you are giving each year to the IRS using Form 709.
So you see this can get complicated especiall in the amount of 270,000,000. You the giver will have to pay 35% gift tax to the "gifts" you gave us...not good...Individual claims the way to go....and again what a great problem to have.
Eric
- good luck!
Can y'all please include your username here in note section of PayPal so I know who's paid? 
lease:
