Out of curiosity I have this question. OK, all taxes are taken out before the final sum is given to the winner. The question then is: if the winner gives any substantial amount to another individual does that person have to pay taxes again on that money? Not that it matter but I was wunderin’.
Anything over a 14,000 gift is taxable, but the donor must pay the tax not the recipient.
I wondered about that, too, and have decided the way I would do it to share with my kids, etc. I think the money handed on to someone else, they would have to then pay taxes on it, too. If you win, Allen, when you cash it, say it was a “joint” ticket between you and whomever you want to give the cash. That way you know for sure each of you will only have to pay the taxes on it once.
Any money given away (after having paid federal taxes) is then taxed at 55% by the "gift tax," after a $1 million exemption.
Yes, the money you just paid nearly 40% in taxes on to receive, is now taxed at 55% to give away. But there's no "income tax" on the part of the receiver. The "giver" is liable for the gift tax.
Mark