December 23, 2016

20 Plant Workers’ $420 Million Powerball Win Cleverly Misses Tax Mess

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There is plenty of feel-good news that twenty Tennessee metal manufacturing workers are splitting a $420.9 million Powerball jackpot. The cash to the employees of North American Stamping is $254 million, or $12.7 million per person before taxes. One of them, Amy O’Neal, told The Tennessean that their group has been playing the lotto for eight years just “for fun.” Ms. O’Neal, who bought the ticket for the group, said they usually buy about $120 worth of tickets every Wednesday and Saturday to support education and the state of Tennessee. Is that a hobby, a business, or a loose investment partnership? The IRS sometimes asks precisely that question, and it can matter. These 20 workers have been cooperating and pooling their ticket buys for years, which arguably makes them a real partnership for tax purposes. And that could matter. Taxes apply to the win, of course, but the nature and… Read More...

Posted in: General Interest