Lets say hypothetically I won 60 million dollars. I think you pay out a third for taxes, so you end up with $40 mil. Now lets say I want to give 10 million to someone. Would that 10 million be taxed again or is it just 10 million straight because it has already been taxed. If it does get taxed a second time, can’t you give the money BEFORE you get taxed the first time so you don’t get hit twice? Curious and ignorant in this area.
In Canada lottery winnings are not taxed.
As for your scenario, I doubt there would be tax on the $10 million gift. A gift is not income. But I’ll let someone who knows provide an exact answer…
In the US, I believe you can give someone a gift up to $10,000 tax free. I imagine that any amount over that will be taxed.
You really want to work with an expert before turning in the Big Ticket.
You can assign parts of the winnings according to any reasonable breakup. E.g., 10 people in an office pool get 1/10 of the prize, etc.
If you assign a part to a person as a gift, the taxes get taken out of their share (once) and no problem.
If you assign a part to a charity, they don’t pay taxes, neither do you.
If you take it all, pay taxes, but then give some to a charity, then you can take a deduction from your taxes like any charitable gift. This would get you back some of the money taken off when you cashed in, if it’s the same tax year, etc. (IANATA though.)
And so it can get complicated. So win the millions (the easy part) and then talk to an expert (the hard part)!
Of course it can be taxed twice or three times or ten times. Generally, every person into whose hands it goes will be taxed on it. It’s the same with your wages. You get taxed. Then you pay your cleaning service lady with that same money and she gets taxed. Then she saves up all her money and gifts her grandson $30,000 and he gets taxed on the amount over the gift limit. It’s not fair but it’s just the way it is.
Not always. Wages are taxed, interest income is taxed, capital gains are taxed, dividends are taxed, gambling winnings are taxed, etc. But a gift is not taxable to the recipient, no matter how much it is. The person giving the gift may be subject to taxation on it, if it exceeds the $11,000 per person per year limit, but the recipient gets it free and clear.
The gift tax imposed on the person who makes the gift relates to that person’s estate tax, and is a messy subject - there are a bunch of exceptions and exclusions. If you’re really interested, go to the IRS website and hunt down Publication 950.