Friday, March 16, 2012
New York Times, Worker Who Hid Lottery Win Must Share $38.5 Million Prize:
There were some dark twists in the plot line, inevitable, perhaps, when friends fight over $38.5 million in lottery winnings.
The friends, construction workers from New Jersey, said they had pooled their money for lottery tickets for years. Five of them relied on a member of their little group, Americo Lopes, to buy the tickets. In November 2009, he collected their money and bought a Mega Millions ticket that won, but he told no one except lottery officials. He cashed in the ticket as if it were his alone. The lottery deducted taxes and sent Mr. Lopes a check for $17,433,966. ...
On Wednesday, a jury in Union County ordered Mr. Lopes to share the winnings with the five former co-workers. ...
Eric Kahn, a lawyer for Mr. Lopes’s former colleagues, said some details had to be worked out, like how much each man would receive and how much each might owe in taxes. “The lottery paid him,” Mr. Kahn said, referring to Mr. Lopes, “and the lottery withheld a chunk of taxes. We’ve got to work on the taxes,” he said.
- New York Post, Hey, Lottery Louse, Pay Up
Exam question: Explain the 2009 and 2012 tax consequences of these events to Mr. Lopes. (Hat Tip: Les Book.)
Update: David Elkins (SMU) passed along the remarkably similar article by Dave Barry, The Lavender Hill Mob Takes On The IRS