If you won 90 million in the lottery, would you still buy lottery tickets after that?

Asked by Dutchess_III (41538) December 5th, 2018

I’ve had reason to tell several of my classes about my cousin winning 90 million in the lottery. It’s a good ice breaker, and asking each kid what they’d do with that much money is a good way to help me get to know how each student thinks.
Today, in my 3rd grade classroom, one student asked if my cousin still bought lottery tickets! I thought that was a damn fine question, and I have sent her a message. I’ll get back to you on that.

If you won the lottery would you still buy tickets?
Do you think the Obama’s buy lottery tickets?
I damn sure buy lottery tickets!

Observing members: 0 Composing members: 0

Update. Yes she does occasionally buy lottery tickets now. (Remember she’d never bought one before the clerk asked her if she wanted one 4 years ago.) But she said they’ve changed the rules and it’s harder to win the lottery now. I asked what they did, she didn’t know. She just said she knew the rules had changed…..

Dutchess_III (41538)

Why not? If I was lucky once I would give it another try and win bigger amount than earlier.

Rohith (395)

Fortune favors the bold

josie (30158)

Yes.

I have a friend who won “only” \$1 million, (\$650,000 after taxes). He bought many more lottery tickets because he figured he could deduct the losers from his winnings and this reduce his taxes. He is also going to casinos much more often.

(I honestly worry about him and his family.)

LuckyGuy (37512)

What makes him think he can deduct the cost of losing lottery tickets?

Dutchess_III (41538)

He can only deduct 35% (or his tax bracket) so \$10,000 worth of tickets he can deduct \$3,500.

What is the IRS justification for deducting the cost of gambling?

Dutchess_III (41538)

Since he has to pay tax on his winnings he can subtract the cost of losing tickets.

LuckyGuy (37512)

So they treat the winning ticket as income, so all subsequent methods of the same “income” are subject to deductions? Can I deduct the money I’ve spent on lottery tickets?

Dutchess_III (41538)

Can payments for losing lottery tickets be used to offset capital gains from stock sales. There are definitely similarities. The stock market may in general be a safer bet, but it is still a gamble.

As to the original question, I would probably buy lottery tickets occasionally. Out of 90 million dollars, it is a small indulgence.

This is so interesting! I need to ask my tax guy these questions.

Dutchess_III (41538)

@Dutchess_III You cannot deduct more than your winnings.
I’m sure there are specific limits.

LuckyGuy (37512)

It makes sense that you can not deduct more than your winnings, but I thought you were saying they could deduct the cost of the losing tickets that they bought after the winning ticket.

Dutchess_III (41538)

Any losing ticket (for the calendar year) can be deducted but only 35% of the tickets value. Uncle Sam is not going to pay you to buy Lottery tickets.

You cannot deduct losing Lottery ticket for income, capital gains or bank interest.

^ Exactly! He still feels it’s worth it since he is “getting” the 35%. Meanwhile he is really paying 65%.

LuckyGuy (37512)