Funding companies has begun making loans against lottery prize winnings. Lottery winners who need cash now have a choice between a lump sum assignment (generally taxable) or a loan (generally tax-free). In both cases the lottery winner assigns some or all of their payments. In the case of a loan, the net payment is collaterally assigned/pledged as collateral and not sold. In the case of a lump sum, the gross payment is assigned/ownership transferred, thus the lottery winner no longer owns the payment. A similar example would be getting a loan against your home. You still own your home and enjoy all the tax benefits associated with homeownership versus if you sold your home you would no longer own it or the associated tax benefits.
Lottery winners have told us they favor the loan versus the sale because they are still able to write off their gambling losses against their lottery winnings. In the case of a taxable lump sum sale, the winner no longer owns the payments and thus cannot deduct any gambling losses against them.
Lottery winners can use their loan to pay off high interest credit card debt, mortgages, college expenses, take a much needed vacation, or to start a business. In today’s financial environment it is prudent to use low interest rate loans to pay off high interest rate debt.
Some additional advantages of lottery loans:
+ Tax Free – Not a sale
+ Quick Approval – over the phone
+ Bad Credit and Bankruptcies okay
+ No monthly payments
+ Great Rates!
As with any financial transaction, a lottery winner should seek the independent advice and guidance of a qualified professional before engaging in a transaction. Peachtree Financial does not offer any financial, legal or tax advice. The statements made herein are not meant to substitute for such independent advice and should not be relied upon for such purpose.
Lottery winners can obtain a loan or lump sum quote simply by calling a Funding agent. Call 888-589-9223 for more lottery funding information.
