Powerball losers selling tickets for a pretty penny

By now, odds are you probably know that there were three winning tickets of Powerball lottery draw in the United States worth an estimated $1.6 billion. There were also an additional 75 winning tickets worth at least $1 million set to be cashed as well. What you probably don’t know is there’s a group of people who failed to win in Wednesday’s draw that are actually selling losing tickets for money.

Why? Well because winners can offset the taxes they pay on their wins by claiming losses on unlucky tickets. The catch is that you can’t directly subtract losses from big wins and simply claim the difference in the United States, so the idea of collecting losing tickets to claim when filing taxes generally only benefits people using the strategy on a much smaller scale. Buying mass amounts of losing tickets after all would likely still get the IRS knocking at your door. Still, a quick search on eBay or Craigslist shows there are lots of losing tickets available for sale.

On the other hand, there’s also an underground market for those who don’t want to claim their own wins and would rather have someone else do it. Some of the possible reasons for such an exchange include:

- Wanting to stay under the radar.

- Avoiding having to share income with spouses or exes.

- Avoiding the taxes that would normally come with claiming a winning prize.

The above reasons explain why a person would be willing to sell a $1,000 winner for say, $750. Those who do this are often referred to as ‘Ten Percenters.’ It makes sense given they’re taking a small piece of a big pie to help people avoid the inherit complications that come with a claim.

Reading about all of these nifty income saving strategies may have you wondering if you can do the same thing to try and duck Canada Revenue Agency. In theory, selling a winning ticket and keeping cash under your mattress instead of claiming it yourself is likely to slide under the radar for a small win. However, buying up large amounts of losing tickets to try and offset the tax implications of a big win would likely still get you in hot water.

Generally speaking, it seems as though the CRA evaluates tax saving tricks related to gambling on a case by case basis. For example, back in 2012, a poker player seemingly earning the bulk of his income from playing the game was overruled in court when he tried to argue that gambling losses should count as a tax deduction. He lost the case as the CRA ruled that gambling with the intent of producing consistent opportunities to win is a personal activity, and not a commercial activity that would warrant losses being considered a business expense.

At the end of the day, there are millions of ways to make millions of dollars and the truth, is using gambling as a tax saving strategy is probably a gamble in itself over the long run. Legal grey areas and loopholes do indeed exist all around the world however and it appears for now that both winners and losers are cashing in on the biggest lottery jackpot ever.