(November 6, 2018 at 12:52 pm)Gawdzilla Sama Wrote:(November 6, 2018 at 10:30 am)BrianSoddingBoru4 Wrote: Suppose I were to win a $300 million jackpot. I settle for half AND have pay the income tax. This is going to leave me with about $80 million.No, no, no. You get the entire amount. The lump sum payment is after taxes. The annual installments are after taxes. You get a "check" for the amount either way. It's just that one way you have an guaranteed income for thirty years, and the other way you have a large sum of money to use, maybe invest. I would choose the lump because I don't know what the tax rate will be in the future, and I would worry that the government would renegotiate the deal if they were desperate.
Not how it works here. If you opt for the lump, you get 50% of the total jackpot, and you pay tax on that. If you choose the annuity, you get the full share every year and you pay the tax on the annuity payment. In either case, taxes are your responsibility, the government don’t do it for you.
Boru
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