Quote:
Originally Posted by Hadleyite
The value of a lottery winning is generally posted as if the winning were to occur with annual payments over a 30 year period. When the winning is taken as a lump sum payment the value is reduced to reflect this method. The taxes are then paid on that winning which results in the final listed value.
The calculation of the tax rate in the previous posting is inaccurate.
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Spot on! If a single payment, the taxes are based on the cost of the annuity the lottery would buy to provide a XX-year payment schedule of $___ per year.