Question

What sections of the IRC are applicable to lottery winnings and how to held them?

What sections of the IRC are applicable to lottery winnings and how to held them?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer : -

The IRS deduct 25% of the lottery winnings prize before the prize is even gets to the winner. Then the winner has to pay tax on the remaining amount during tax filing.

The distribution of prize money is upto the winner, the winner can have one time payment or can have payments in installment for 30 years maximum.

The winner has following options : -

1) Cash option : - taxable under IRC section 61 and 74.

2) Annuity option and 3) Sale of lottery ticket.

Winners can deduct lottery losses and cannot take losses under itemized deductions.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
When I was considering what to do with my $10,000 lottery winnings, my broker suggested that...
When I was considering what to do with my $10,000 lottery winnings, my broker suggested that I invest half of it in gold, the value of which was growing by 8% per year, and the other half in certificates of deposit (CDs), which were yielding 2% per year, compounded every 6 months. Assuming that these rates are sustained, how much will my investment be worth in 13 years? (Round your answer to the nearest cent.)
You have just won the Georgia Lottery with a jackpot of $53,000,000. Your winnings will be...
You have just won the Georgia Lottery with a jackpot of $53,000,000. Your winnings will be paid to you in 26 equal annual installments with the first payment made immediately. If you feel the appropriate annual discount rate is 14%, what is the present value of the stream of payments you will receive?
You have just won the lottery! You decide to take your winnings as a series of...
You have just won the lottery! You decide to take your winnings as a series of $1,000,000 payments for the next 20 years with the first payment being paid today. What method should we use to value the series of payments? Select one: a. Ordinary Annuity b. Ordinary Perpetuity c. Compounding Annuity d. Annuity Due e. None of these describes how the series of payments should be valued.
You have just won the Georgia Lottery with a jackpot of $26,000,000. Your winnings will be...
You have just won the Georgia Lottery with a jackpot of $26,000,000. Your winnings will be paid to you in 26 equal annual installments with the first payment made immediately. If you had the money now, you could invest it in an account with a quoted annual interest rate of 8% with monthly compounding of interest. What is the present value of the stream of payments you will receive?
You have just won the Mega Millions Lottery with a jackpot of $54,000,000. Your winnings will...
You have just won the Mega Millions Lottery with a jackpot of $54,000,000. Your winnings will be paid to you in 26 equal annual installments with the first payment made immediately. If you had the money now, you could invest it in an account with a quoted annual interest rate of 12% with monthly compounding of interest. What is the present value of the stream of payments you will receive?
Which two sections of the IRC would you use to determine the self-employment tax rate for...
Which two sections of the IRC would you use to determine the self-employment tax rate for an individual who earned $100,000 in self-employment income? How much self-employment tax would be due from a taxpayer who earned $399 in self-employment income? Enter only numbers, no dollar signs or commas and round to the nearest dollar (e.g. if the your answer is $61.05 then enter 61 in the blank)?
Sally works for tire dealership. She is in charge of purchasing lottery tickets for her office,...
Sally works for tire dealership. She is in charge of purchasing lottery tickets for her office, which includes the sale representatives of the large dealership. Usually 10 to 15 sales representatives contribute each week to purchase community lottery tickets. Recently, the prize amount has steadily increased which has lead to more and more employees contributing. This week, the prize is nearly $1 billion. A total of 16 other employees have contributed $10 for a total of $170 worth of tickets....
You won a lottery! To collect your winnings you will be paid annual amounts of $10,900...
You won a lottery! To collect your winnings you will be paid annual amounts of $10,900 for each of the next 22 years. The appropriate discount rate is 9 percent per year. Calculate the difference in the present value if you are paid these annual amounts of money at the beginning of each year rather than at the end of each year. (please explain how to calculate on a financial calculator) A) 11,881 B) 9779 C) 10,900 D) 9,263 E)10,670
What are the Federal Reserve’s goals and who established them? How are Fed officials held accountable...
What are the Federal Reserve’s goals and who established them? How are Fed officials held accountable for meeting them? Explain why the Chair is most influential Fed official.
You just won $1 million dollars in the lottery! They offer you two options for your...
You just won $1 million dollars in the lottery! They offer you two options for your winnings: a lump sum payment right now, or $100,000 a year over the next 10 years. Current 10-year interest rates are at 5%, and the current tax on lottery winnings is 40%.   What is the amount you will receive today with the lump sum option? Which option would you select? How would you present your argument for your decision in a debate? Sorry, you...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT