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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 124817  
Subject: Re: hypothetical question - just for fun Date: 9/24/2004 2:55 PM
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Like I said above,
"don't confuse the withholding with the tax liability. If you win a jackpot, they don't withhold enough. The law currently provides for a flat 25% to be withheld. But you'll easily be in the top bracket at 35%. And the way some lottery winners spent it, they can have a problem on the following April 15."

However, that won't necessarily be the case, depending on what you do with a charitable foundation, for example. You could put 30% of your adjusted gross income in a private foundation and deduct it currently. Depending on the size of a lottery jackpot, that could be enough to fund your charitable commitments for the rest of your life. And the money invested in the foundation is tax-free (almost - there's a 2% tax on investment income.)

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