What, is their money not as valuable?

[Dreamstalker]

I've read that the lump-sum option could be more desirable as you know what's being taken out for taxes right off and don't have the 'risk' of changing tax laws to futz up a withholding.

The idea that the winner's tax is paid out of the ticket sales makes sense, but around here that's where a lot of towns get at least some of their revenue from (IIRC the store that sold winning tickets also gets a commission, not sure how that's paid).

[Ginger Tea]

IIRC the store that sold winning tickets also gets a commission, not sure how that's paid.

They get whatever their cut is from the initial Dollar sale

[Mytical]

Also, the stores that sell the winning ticket have gotten up to $100,000 from the lotto commission. On top of the cut for selling the tickets. Most of the time it is not widely advertised, however.

The lottery idea around here is ingenious really, and is known as a 'poor mans tax'. The reason is, you have a better chance of getting struck by lightning then winning it, but loads of people play it every time. Only a fraction of ticket sales actually go back into the lotto also. So if you see $105 milllion! Then to get there the state has probably made $200 or more million so far. Then if you take a lump sum that is cut in half . If you take the payments and get it all, they get to keep the interest that money will make..it's win/win for them.

If I haven't messed up my calculations the odds of winning a lotto with the numbers 1-44 that you need to get 6 matching is 7,059,052. 44*43*42*41*40*39/(6*5*4*3*2*1) Think the actual highest number is 46 which would make it even harder (if one of the numbers has to match exactly the odds go way up also).

As you can see, not very good odds.

[Racket_Man]

That is true, I was speaking for the lottery here. As mentioned not only does lump sums usually take half of any winnings (so if you 'win' 10 million, you get about 5 or so..give or take) then you have to report gambling winnings and they tax it. Not sure if the tax is off the 'original amount' or the 'lump sum' tbh.

So if you win that 10 mill, you get 5..and if they tax the 10 mil at 35% you would end up with 1.5 but most people don't realize that and think "I have 5 million!!!"

Even if they only taxed the 5 that you got..that is 1.75 mil tax for total after taxes of 3.25 million. Which seems a LOT, but if you are not careful you can go through that fast..especially if you are not used to having a lot of money.

.

I though that ALL of the taxes were collected at the same time Federal, State and local. I assume that the taxes are calculated on whatever sum you actually receive esp in the lump sum payout not the whole final big jackpot

I have never heard of a $10 million winner getting, after taxes on the lumpsum payout , only $1.5 million

I am trying to remember the stats from the latest winner the recent MegaMillions $335 million. I believe the lump sum payout was $150 (maybe $140) million and after taxes and such the winner would get like $75 million. you lose like 55 or 60% of the lump sum payout in taxes

[Mytical]

*nods* I don't know exactly how much gambling winnings are taxed. I'll be the first to admit that. Each state and city has different taxes, that would also be taken out along with Federal. For all I know the amount taken out of the lump sum also includes the taxes. Never won a lotto .

[HEMI6point1]

A couple of years ago in S. Carolina, a man won 260 million but due to his state taking out state and federal taxes he wound up with "just" 90 million, and he was complaining about it! If I were the lottery commission, I would tell him, "Okay we'll give you your 3 dollars you spent on the ticket back and we'll give the winnings to someone else. Deal?"

Anyway, to elaborate, if I won the lottery as a car enthusiast I would buy cars that either a) I have an emotional connection to or b) I always saw myself driving. Either way I would restrain my vehicle count to 12.

I would buy a new car from each of the big 3: Ford Taurus SHO (always liked the SHO's), Cadillac CTS-V coupe, and a Challenger SRT8.

Then for classics I would have Chip Foose resto-mod 5 classics:

1970 Chevelle SS, 1996 Impala SS, 1979 Cadillac Coupe Deville (the car I learned how to drive in). Each would be upgraded to GM's new LSX454 EFI crate engine and TCI's new 6x 6 speed automatic and a suspension upgrade from Hotchkis. Next would be a 1996 Cadillac Fleetwood with a swap to an LS3 crate engine and 6-speed auto. Finally, an '87 Buick Grand National with a swap to GM's new 3.6L direct injection V6 with twin turbos and again a 6 speed auto. Purists will hate me, but at least I'll have classic rides with a modern drivetrain and suspension.

Rounding out the street legal cars would be the new 2011 Bentley Continental GT, the only exotic I'd have. Why? Because when I see a guy driving a Bentley, I see someone who has class and taste. When I see someone driving a Ferrari, I see a douche who likes to throw his wealth around.

Finally, I would buy a diesel crew cab dually pickup (Sierra Denali) and a Haulmark motorcoach with a stacker trailer to haul my race car (a Challenger drag pack). The dually would be for towing the car when the motorcoach is not needed, or simply hauling stuff.

Other than buying a regular sized home (okay, maybe expanding the garage LOL), and furnishing it and buying some new techie stuff, I would be a really simple guy as I said in a post above. Not interested in wild parties or vacations or giving money to people.