The Breitling Watch Source Forums

I read 40-50% and as of now it's at give or take 550 mil so do the math

Good luck everyone!

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"I don't got the bright watch I got the right watch" -Jay Z

EDIT: holy (bleep!)

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"I don't got the bright watch I got the right watch" -Jay Z

It's a flat 25% tax for federal. That is a fact. For state, if you even have income taxes in your state, it ranges from 6-9%. The max you'd hit is about 35% taxes. No idea where you read 40-50%.

Well on the back part of the California Megamillions playslip it stated "cash value: single payment, estimated between 40-50% of the estimated jackpot"...

so I guess it's fair to say that not all of the rest can be assumed "taxes"... maybe fees?

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"I don't got the bright watch I got the right watch" -Jay Z

"Estimated jackpot" is the key phrase here. Sure, it's 40-50% of the estimated jackpot, which is $640m. However, you're TAXED on the cash value ($462m). I guess we just had a miss communication here. People buy into that "advertising" of the "JACKPOT" but that "JACKPOT" is only attained if you take the annuity for 26 years.

Sounds like someone who won before...

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"I don't got the bright watch I got the right watch" -Jay Z

Nah, it's just a common misconception.

They advertise the jackpot as $640 million, right? However, in order to really get that $640 million, you have to take the 26 year plan. With that said, it's never $640 million...because there are taxes. However, everyone thinks that they can get a lump sum of $640m minus taxes. They fail to understand that the cash option is much less.

So, with that said, cash option less taxes equates to, almost, 50% of the JACKPOT (640m). However, that doesn't mean taxes are 50%. It just means they're comparing taxes on the cash lump sum to the "jackpot" amount.

So who won? I won $3! Ha!

I beat you, I won $4 bucks!! YEA BABY, gonna buy me a new watch........magazine.

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"I don't own any watches, I just lease them"

I bought a $20 spot. I dont know how it works, but I think I got 3 numbers on one of them.

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-RJ

This really is simple.

Traditionally lotteries paid out in 20 or 25 year annuities, which means they purchased a a stream of payments by paying a premium. Now they give the option of taking the amount they would pay for the annuity premium, which varies according to the interest rate - the lower interest rates are, the higher the annuity premium. The higher interest is, the lower the annuity premium to produce the same benefit stream. Currently, the price of an 25 year annuity is about 52% of the total of the stream of payments. Whatever it is, that is what you get.

To make it easier, if the jackpot is $100 mil and the cost of the annuity is 50% like it was a year or so ago, you win $50 mil. EVERY single penny of that is regular income subject to the same income tax rates all other non-capital gains are. The 25% is simply amount of WITHHOLDING. Other lotteries withhold 15% Federal. Not much different than hitting a $10k slot in Vegas - the IRS gets withholding before you leave and blow it on a watch. If you won, $330 mil, it would take some good tax work not to owe more than 25% to the Feds.

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SHARKMAN