Why Lottery Winners Are Told NEVER to Put Their Money in a Bank

Why Lottery Winners Are Told NEVER to Put Their Money in a Bank - After the Jackpot
https://www.youtube.com/watch?v=_ucduD1yUH8


AI wrote:
Claiming lottery winnings through a limited liability company (LLC) and taking the lump sum requires strict adherence to state lottery regulations, timing rules, and professional legal guidance.

Key Realities of Using an LLC for Lottery Winnings

• State Anonymity Laws Vary: Only a small number of states allow LLCs or trusts to claim lottery winnings completely anonymously. In states like New York, public disclosure laws still require releasing the names of the LLC and its members/beneficiaries.
• Timing is Critical: The LLC or trust must be formed and properly documented before you sign or present the winning ticket to the state lottery commission. Once a ticket is claimed in an individual's personal name, it cannot be transferred or reversed.
• Ticket Signing Rules: Many state lotteries require a human individual to sign the back of the ticket. Trying to sign an LLC name directly onto a ticket can sometimes invalidate it depending on local rules, which is why working with an estate attorney or fiduciary advisor is essential to handle assignment and claims properly.
• Lump Sum vs. Annuity: Choosing the lump sum provides an immediate, discounted cash payout (typically 50% to 60% of the advertised jackpot), giving you full investment control, whereas an annuity pays out over 30 years with annual increases.
• Tax Treatment: LLCs feature pass-through taxation, meaning the income passes through to the members to be taxed at individual federal and state income tax rates (with top federal rates reaching 37% or higher plus initial 24% mandatory federal withholdings).

Recommended Steps Before Doing Anything

1. Do not sign the ticket yet. Put the physical ticket in a secure location like a bank safety deposit box.
2. Assemble a team immediately: Hire an experienced tax/estate attorney, a fee-only fiduciary financial planner, and a certified public accountant (CPA).
3. Verify your state's rules: Consult your legal team to see if your specific state permits LLC or trust claims, and whether true anonymity is legally achievable in your jurisdiction.
If you'd like to share which state you are in or whether you are planning for a multi-person pool or individual win, I can provide more specific details on local rules and privacy options.


10 Signs Your Jackpot Lawyer Is About To Rob You (BEFORE You Spend a Dollar) - The Jackpot Tales
https://www.youtube.com/watch?v=bBgXhiUzryg

Oh wow, thanks for the clickbait and AI slop

Publisher's Clearinghouse will show up at my door if I win more than $600 from them. Apparently I'm being scammed because I got a check without the balloons.

4 Reasons Banks Are Closing LLC Business Accounts - 850 Club Credit - 255K subscribers
LLC | Start For $0 - https://bit.ly/4jZ68IC
https://www.youtube.com/watch?v=JeII5fv6G_g

AI wrote:
Yes, you can report gambling winnings through an LLC if you treat gambling as a trade or business, but you must meet the IRS’s professional gambler standard and follow its reporting rules. All gambling income is taxable, losses are deductible only up to winnings if you itemize, and you should avoid structuring personal gambling accounts as a business to prevent IRS challenges. (Edit: 90% of losses in 2026 unless reversed in 2027.)

How Gambling Income Is Treated Under an LLC
1. General Tax Rules for Gambling
Casual gamblers: Report all winnings on your personal return (Form 1040, Schedule 1), regardless of amount, and may deduct losses up to winnings if itemizing.

Professional gamblers: Report income and expenses on Schedule C, pay self‑employment tax (currently 15.3%), and make quarterly estimated tax payments.

2. LLC and Gambling
An LLC can be taxed as a sole proprietorship, partnership, S‑corporation, or C‑corporation; the choice affects how gambling income is reported and taxed.

If gambling is your primary livelihood and meets the IRS nine‑factor professional gambler test (e.g., time spent, profit motive, recordkeeping), the IRS may treat it as a trade or business.

If it’s casual gambling, the LLC structure offers no special tax advantage — you’d still report on a personal return.

3. Key IRS Requirements
Recordkeeping: Maintain a contemporaneous log of all wins and losses, not just casino statements.

Loss deduction limit: You can’t deduct more losses than winnings reported.
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Withholding: Payers may issue Form W‑2G for certain winnings; report all winnings even if not reported to you.
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New law (2026): Limits loss deductions to 90% of winnings for professional gamblers.
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4. Risks and Practical Considerations
Personal vs. business accounts: Many gambling operators require personal accounts and report winnings under your SSN, not an EIN . This makes using an LLC for gambling risky; the IRS may view commingling funds as improper.

Avoid “piercing the corporate veil”: Keep business and personal finances separate.

Consult a tax professional: State laws (e.g., New York) and federal rules can differ for gambling businesses.

5. Bottom Line
An LLC can be used for gambling income only if you genuinely operate as a business under the IRS’s professional gambler rules, keep meticulous records, and accept the tax and compliance obligations. For casual gambling, the LLC offers no benefit and may create unnecessary complexity.

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Casinos may no longer accept business checks for buy-ins.

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Can You Claim Gambling Winnings Under An LLC?
By Matthew Russel - October 30th, 2025
https://factsontaxes.com/can-you-claim-gambling-winnings-under-an-llc/