Powerball "technical glitch"?

#102
#102
GordonC said:
Even though CNBC, an interesting read:
https://www.cnbc.com/2021/01/11/sta...t-their-sights-on-pro-athletes-earnings-.html

From the article:
The tax picture for athletes gets more complicated for “away” games.
States with an income tax generally tax all income earned in the state by non-residents.
A visiting team of professional athletes can mean many thousands of dollars in state tax revenue for every day they spend in-state.
In a normal season, an average National Football League player will file between eight to 12 non-resident state tax returns, said Losi.
National Basketball Association players file 16 to 20 of these tax returns, while Major League Baseball players may submit 20 to 25.

Also:
The objective for states is to tax as many so-called “duty days” of non-resident athletes as they can. They generally include game days, travel days and any part of a day spent within the state.

Lopez keeps a spreadsheet for every athlete-client detailing where they are each day, backed up in many cases by a cellphone app that tracks their location.

States can and do demand proof of athletes’ whereabouts.
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What a mess. Pro needs a damn good and trustworthy personal accountant, lawyer and agent.
 
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#106
#106
kiddiedoc said:
They don't pay out $1.9 B, though. The lump sum payout is estimated at $929M.
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And if you choose the 20 year payout it's only 100M a year pre-tax.

Well, even on the lump sum payout, there is still the fed/state tax portion that has to filed. THe big money is made on everyone selecting the lump sum so they can give you the 20 year NPV of $2B.
 
#107
#107
IluvdoubleD's said:
You guys really don't know how this works? Powerball has to have the 1.9 Billion to pay out. That's the pay out. If you take the lump sum, the gov will hit you will 50% in taxes off the top. That's the tax. If you take the lifetime payout, tax is way cheaper, but who knows how long that will last? What happens when there is no more lotto? People usually just take the lump and pay the tax. It's roughly 50% off the top to the gov. Powerball still has to pay that out.

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You forgot about the 20yr NPV discount off the top as well if you choose lump sum. THe total payout value 20 years from now would be $2B. If you want it all today, they NPV it to today's value. And the taxes of course.
 
#115
#115
IluvdoubleD's said:
You guys really don't know how this works? Powerball has to have the 1.9 Billion to pay out. That's the pay out. If you take the lump sum, the gov will hit you will 50% in taxes off the top. That's the tax. If you take the lifetime payout, tax is way cheaper, but who knows how long that will last? What happens when there is no more lotto? People usually just take the lump and pay the tax. It's roughly 50% off the top to the gov. Powerball still has to pay that out.

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If you're looking for incorrect information, as usual the Double Douche is your man.
 
Last edited:
#118
#118
I believe I read that nobody has ever taken the annuity payments, at least on the larger jackpots.
 
#119
#119
Vol423 said:
If you're looking for incorrect information, as usual the Double Douche is your man.
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none of what he says is true
PB has the cash option available
If someone does not take the cash option, then there is the first of 30 payments and the PB invests the remainder in government bonds.
This is common knowledge if you attempt to find any information about how this works.
 
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#120
#120
GordonC said:
none of what he says is true
PB has the cash option available
If someone does not take the cash option, then there is the first of 30 payments and the PB invests the remainder in government bonds.
This is common knowledge if you attempt to find any information about how this works.
Click to expand...
His statement that if you take the lifetime payout the taxes are way cheaper is 100% unadulterated BS too. He's making definitive statements about a subject that he clearly knows absolutely nothing about (of course, that same comment applies equally to just about every other post he makes on this board too).
 
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#121
#121
Vol423 said:
His statement that if you take the lifetime payout the taxes are way cheaper is 100% unadulterated BS too. He's making definitive statements about a subject that he clearly knows absolutely nothing about (of course, that same comment applies equally to just about every other post he makes on this board too).
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Actually, I'm pretty sure that the taxes are much higher if you take the annuity because you are only taxed on the money you receive (which is roughly half with the lump sum).
 
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#122
#122
kiddiedoc said:
Actually, I'm pretty sure that the taxes are much higher if you take the annuity because you are only taxed on the money you receive (which is roughly half with the lump sum).
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Exactly...you will pay FAR MORE in taxes under the annuity payment option, and that doesn't even take into account changes in future tax rates. If you think tax rates are not going up in the future the way our federal, state and local governments spend money like drunken sailors on shore leave, I've got news for you.
 
#123
#123
kiddiedoc said:
I believe I read that nobody has ever taken the annuity payments, at least on the larger jackpots.
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I don't get that. IIRC, you can inherit the winning to another person if something happens to you. The annuity option is a contractual payment. Mega Million allows the annuity transfer to a single chosen beneficiary. Power Ball considers it part of your estate and allows it's trasnfer as any normal asset inheritance, most likely to multiple heirs. Simple paraphrase of both lottery's, but you do not forefeit the annuity payments when you die. I think alot of folks assume you do, and ignorantly give up money to get the lum sum and do with as you please. If that's the case, they picked a bad financial advisor to set everything up, or ignored good advice. In the case of the current Powerball sum, a single winner would have a pre-tax annual payment in excess of $70mil. Verses an automatic 24% immediate federal tax, plus state taxes if applicable plus NPV devaluation. A "small" jackpot, I most likely would take the lump sum. THis jackpot, I would take the annuity payment, and then go dot my I's and cross my t's in my Will.

You lose so much money not taking the annuity payment, cause most people will not invest properly to recoup the NPV devaluation over hte long-haul when they take lump sum.
 
#124
#124
GVF said:
I don't get that. IIRC, you can inherit the winning to another person if something happens to you. The annuity option is a contractual payment. Mega Million allows the annuity transfer to a single chosen beneficiary. Power Ball considers it part of your estate and allows it's trasnfer as any normal asset inheritance, most likely to multiple heirs. Simple paraphrase of both lottery's, but you do not forefeit the annuity payments when you die. I think alot of folks assume you do, and ignorantly give up money to get the lum sum and do with as you please. If that's the case, they picked a bad financial advisor to set everything up, or ignored good advice. In the case of the current Powerball sum, a single winner would have a pre-tax annual payment in excess of $70mil. Verses an automatic 24% immediate federal tax, plus state taxes if applicable plus NPV devaluation. A "small" jackpot, I most likely would take the lump sum. THis jackpot, I would take the annuity payment, and then go dot my I's and cross my t's in my Will.

You lose so much money not taking the annuity payment, cause most people will not invest properly to recoup the NPV devaluation over hte long-haul when they take lump sum.
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Your final statement is humorous. You assume that the person is going to be ignorant and incompetent with the money. If you're really bad with money, GVF is correct, the annuity option is probably better for you.

While interest rates were incredibly low, you were MUCH better taking the discounted net present value immediate cash payment option. With interest rates FAR higher now (thanks Joe!), the scenario is a little more complex. However, by taking the immediate cash payment option, you have locked into the current known income tax rates rather than rolling the dice that future income tax rates aren't much higher (and they likely will be due to government greed and incompetence). While interest rates were low, you would almost have had to not invest the money at all to not clear the discount rate.
 
#125
#125
Vol423 said:
Exactly...you will pay FAR MORE in taxes under the annuity payment option, and that doesn't even take into account changes in future tax rates. If you think tax rates are not going up in the future the way our federal, state and local governments spend money like drunken sailors on shore leave, I've got news for you.
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If the fed tax rate of 24% taken immediately on the lump sum is the same fed rate applied to annual annuities, in the case of this $2B jackpot it's $480mil sliced both ways. $2B by 20 years is $100m payment per year. Apply the 24% to that times 20 years and its all $480mil. Unless there is a different fed tax rate on the annual annuity than on the lump sum, the only variable is changing tax laws and rates over the course of 20 years. When you apply the fed tax rate, plus NPV discount, a TYpical lump sum payout will hover around 50% of the jackpot. THat's not accounting for additional state and local taxes depending on what state you live. A prudent person will make up the NPV with proper investment. most jackpot winners go broke. A lottery commission is contracted to pay the amount whether lump sum or annuity, so you don't lose the payments if you die.
 
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