Leatherneck Nation

What would the tax be if you 50 million to the school. Would they tax since it is state university? I know that if you give your family $1,000,000 they take another gift tax on top of the already taxed amount. All I hear about the lotto is TAX TAX TAX.

I think the taxes would be taken out when you're awarded the money. And then you're taxed on things like investment earnings as well as most purchases. I don't think you'd be taxed on a donation, but idk for sure.

WIU0812 wrote:What would the tax be if you 50 million to the school. Would they tax since it is state university? I know that if you give your family $1,000,000 they take another gift tax on top of the already taxed amount. All I hear about the lotto is TAX TAX TAX.

If you win the powerball you will have Federal income tax at the highest rate, 39.6%, and at our state rate, 3.75%, if you live in IL. You would pick up all of that on your tax return. You'll then pay taxes on investment earnings as you go forward (interest, dividends, capital gains).

Then let's say you gave money to Western. You'll pick up the charitable donation on your tax return as well, lowering your taxable income caused by the winnings. Thus, saving you money on taxes.

If you gave $1,000,000 to your family, you would file a gift tax return with the total amount given per person, less a $14,000 annual exclusion. However, that number reduces your lifetime exclusion amount (about $5.3 million) that you can give away for free. So unless you've given away a bunch of money before, you will not pay taxes on that transfer. The gift tax is basically just a way to protect the estate tax by making sure rich people don't give all their money to family members before they die and pay no estate tax.

W1U wrote:

WIU0812 wrote:What would the tax be if you 50 million to the school. Would they tax since it is state university? I know that if you give your family $1,000,000 they take another gift tax on top of the already taxed amount. All I hear about the lotto is TAX TAX TAX.

If you win the powerball you will have Federal income tax at the highest rate, 39.6%, and at our state rate, 3.75%, if you live in IL. You would pick up all of that on your tax return. You'll then pay taxes on investment earnings as you go forward (interest, dividends, capital gains).

Then let's say you gave money to Western. You'll pick up the charitable donation on your tax return as well, lowering your taxable income caused by the winnings. Thus, saving you money on taxes.

If you gave $1,000,000 to your family, you would file a gift tax return with the total amount given per person, less a $14,000 annual exclusion. However, that number reduces your lifetime exclusion amount (about $5.3 million) that you can give away for free. So unless you've given away a bunch of money before, you will not pay taxes on that transfer. The gift tax is basically just a way to protect the estate tax by making sure rich people don't give all their money to family members before they die and pay no estate tax.

If you eclipse your 5.43 million (2015 and will actually increase this year), would you then pay a 40% federal Gift tax on all monies after that amount? Just want to figure this out as I'm planning to donate 20+ million to WIU after I win tonight.

Lets make it 25.43 million and I'd owe 8 million in gifts taxes, but then I get the tax deduction for this for 2016? Deductions you can write off for universities can be up to 50% of your gross income and I'm assuming the lotto in 2016 would count (800 million gross) and I could deduct up to 400some million? We need a new high school and rec center in town and I plan on giving 50 of my closest friends and family a cool mill.

I'll obviously be assembling a financial team shorty, but trying to get an idea before I win tonight!!!!!!!

letsgonecks wrote:
If you eclipse your 5.43 million (2015 and will actually increase this year), would you then pay a 40% federal Gift tax on all monies after that amount? Just want to figure this out as I'm planning to donate 20+ million to WIU after I win tonight.

Lets make it 25.43 million and I'd owe 8 million in gifts taxes, but then I get the tax deduction for this for 2016? Deductions you can write off for universities can be up to 50% of your gross income and I'm assuming the lotto in 2016 would count (800 million gross) and I could deduct up to 400some million? We need a new high school and rec center in town and I plan on giving 50 of my closest friends and family a cool mill.

I'll obviously be assembling a financial team shorty, but trying to get an idea before I win tonight!!!!!!!

I don't have a ton of experience with gifting and estate taxes so I can't be positive, but I have a decent idea. If you are married you can also save gift taxes by using "gift splitting."

Yes, once you eclipse your lifetime gift exclusion you'll owe tax on gifts equal to the estate tax rate. This is on a gift tax return separate from income taxes. On your 1040, you'll pick up that gross amount in income like you said and then claim a deduction for what you give away to charity or government functions like Western.This is limited to 50% of AGI like you said and the rest is carried forward to be used in a later year.

I hope one of us on here wins!

I know one thing, I will need a financial advisor with all this tax mumbo-jumbo!

WGEM SC Interview of Matt Tanney from this morning:

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