How You Can Win the Lottery and Still End up Bankrupt

How You Can Win the Lottery and Still End up Bankrupt | The Kitti Sisters - 2

098: How You Can Win the Lottery and Still End up Bankrupt


What happens if you win the world record $1.9 billion Powerball jackpot?  How much will you actually get to keep? 🤔🤔

We hate to burst your bubble, but guess what, Palm, you didn’t win the recent jackpot.  According to the actual people at Powerball themselves, your odds of winning the jackpot are 1 in 292.2 million.

That’s NOT the kind of math we like! To put this in perspective, which goes on to say that you actually have a greater chance of getting struck by lightning.  😨😨

Those aren’t exactly the odds we want to be talking about, how about you? In the wise words of Lloyd from the movie Dumb and Dumber, “so you’re saying there’s a chance?”

Not really guys, not really. 🙂🙂

It’s always fun to imagine things right?

But hey, a girl can dream, right?

Before your start daydreaming about the new palatial estate and private jet you are going to buy with your winnings, let’s see how much a single-ticket winner actually gets to take home post-tax and what you must do right away in order to take advantage of the biggest tax deduction allowable by law and pay zero dollars in taxes. 😊😊

Before we take a look at the biggest tax deduction allowable that can help potentially drop your tax bill to virtually zero, let’s take a look at how much you’d have to pay if you follow the typical tax filing practice.

Okay, so the first thing you need to know is that when (if) you win, you have options on how you get paid out. The first way is by electing to get an annuity, where you get paid out over 29 years. The second way is where you choose to get the whole thing as one big bad lump sum. Gimme that money!

So we are going to make some assumptions here, maybe you’re like hey – this isn’t me. Right now we are assuming you are Mr. Average Joe. The likely most appealing option is that you are going to choose to get paid out in a lump sum.

Which is by the way, the Kitti Sisters preferred way!

Because we all know, a bird in hand is worth two in the bush dollar, or something like that. Whoever created this proverb clearly understood how rising inflation is robbing you blind. 👀

The reality is that the value of the US dollar continues to fall steeply, to the tune of almost 10% annually.  This means that getting annual installation payments from an annuity for the next 29 years or so is probably going to be worth much less in the long run.

In fact, we KNOW it will be much less. Also, it’s just way more fun to have all your money in hand so that you can swim in your very own money vault. Think of basically any movie where there’s a pile of gold sitting somewhere – we know you want to be sitting pretty on that gold. 💎

Or, do you want to do it the hard way by splitting your profit with Uncle Sam?

The holidays are coming up, and we all know how tense things can get with family, especially those crazy uncles. Uncle Sam is no exception.

Ok, so now that we know where our priorities lie, let’s look at the tax implications. 🧐🧐

When you decide to go with the lump sum payout option, the great people at Power Ball will say, hey you won’t get that entire $1.9 billion dollars, instead since you want the money right now, we’ll give you $929.1 million, which in any world is a super-humongous amount of money.

That doesn’t seem fair! Typically, with a supermassive lottery payout comes great responsibility or something like that.

We did even more research for you guys and it turns out that there’s other factors that come into play that determine how much taxes you’ll actually have to pay. These include your payout option, your income tax bracket, state tax rates, etc. Did you know that some states don’t tax lottery winners and others do, anywhere from 3-11%?

On the federal side, when anyone wins the lottery, our favorite crazy uncle Sam aka the IRS actually withholds a whopping 24% of your dough off the top. For this particular jackpot, if you chose the lump sum payout option, you would also be subject to the federal income tax of 37% because don’t forget, you have to report your earnings as income on your tax return.

So what does that math even look like? Well, for a single person paying the top tax rate of 37%, the Feds split in your jackpot is $343,767,000! Yikes! 😨😨

This means that your massive win has dropped all the way down to $585,333,000.  Which, don’t get us wrong, that’s a tidy sum, but way way way less than the original lump sum payout of $929.1 million you thought you were taking to the bank.

Okay, so now that we are all bummed out on ever winning the lottery, is there still hope? Obviously!  And that’s why we are here – to show you IF you DO win how to keep more and grow more wealth. 🧐🧐

The simplest way to keep more and grow more wealth is to pay zero in taxes LEGALLY…

To potentially legally pay zero dollars in tax on your Power Ball jackpot is to invest in apartment complexes.

Let’s explain why. 🤓🤓

When you buy an apartment complex, you are eligible for something called bonus depreciation. 

Essentially, the IRS allows you to deduct all personal property in year one of ownership.  Personal properties are anything that is not the actual land aka the dirt your apartment was built on.  This means anything from the beautiful palm trees in the driveway to the appliances to the actual asphalt concrete can all be depreciated.  

The reason why bonus depreciation is so awesome is that it lets you deduct 100% of depreciation on your taxes upfront, which means that you pay a pretty significant amount less in taxes, which is always a good thing. 🤩🤩

Basically, if you qualify and invest your entire windfall of $929.1 million into apartment complexes, depending on your depreciating asset, you may be eligible to depreciate up to 100% of its cost. 

That means when you file your 2022 tax return, you will receive a K-1 statement that shows you have a paper loss of $929.1 million. Guess what…that can be used to offset your income or the income you make off the Powerball $929.1 million.

And just like that, poof, your $343,767,000 federal tax bill simply goes away, and better yet, you still have more paper loss left to offset future gains. 😘😘

We love this kind of math.

Speaking of math, here’s a bubble-bursting statistic for you guys brought to us by our friends at CNBC…did you know that lottery winners on average are more likely to declare bankruptcy in the next 3-5 years than the average American? 😢

We believe this is because this wealth landed in the laps of winners abruptly, and sadly, they didn’t have the time to learn financial literacy. So their spending habits typically are in misalignment with long-term wealth-building practices. You actually see this all the time with professional athletes too, so we aren’t just picking on lottery winners!

Even more than maybe not having financial literacy, it also comes down to spending habits. You strike it rich and all of a sudden you “need” things like luxury cars 🚘, mansions 🏘, designer clothes 👗, you name it. According to an article from, its really a lot of small poor decisions that add up to overspending. 

Things would be different for lottery winners who make the wise choice and invest in good income producing assets like apartment complexes.

Beyond potentially paying zero dollars instead of hundreds of millions to the IRS, because they invested in an income-producing asset, their property will be spitting out cash flow annually, somewhere between 5-8% per year, which is around $74,328,000 a year at 8%. 🤑💰

It’s a beautiful place when you not only get to keep more of your $1.9 billion dollar jackpot but also invest in an asset that actually grows in value over time and generates so much cash flow that you’ll need to tap into the principal amount.  This means that your generational wealth will only continue to grow over time by taking advantage of the biggest tax deduction allowable by law.

But wait you guys, there’s more… ✨

We know we are being cheesy, but for real, apartments obviously produce income, but the true prize is the profit you’ll make when you sell. Typically, apartments are held for 3-5 years with a projected profit return of around 100% in 5 years. 

This basically means that your almost billion dollars you invested can turn into 2 billion over 5 years, essentially doubling your wealth.  If you wait another 5 years, it can turn into 4 billion.  Are you picking up what we’re putting down?

By understanding how to take advantage of the biggest tax deduction allowable by law and investing in an asset AKA – apartment complex that cash flows and will grow in value you will not become a statistic, instead your dynastic fortune will continue to climb for years to come. 🙌🙏



The Kitti Freedom Club


Rate, Review & Follow!

“I love Cashflow Multipliers.” ◀️ If that sounds like you, please consider >> rating and reviewing our show! This helps us support more people — just like you — move toward the financial futures that they desire.  Click here to let us know what you loved most about the episode!

Also, if you haven’t done so already, follow the podcast. We’re sharing the best tips, tricks, and secrets in owning your own time so achieving financial freedom early and permanently becomes easier.  Follow now!

Comments +

Leave a Reply

We're Palmy ➕ Nancy Kitti 〰️ The Kitti Sisters

A sister duo team obsessed with all things financial freedom, passive income, and apartment investing + apartment syndication, who turned a $2,000 bank account into a nine-figure empire.  Now, we're sharing with you the behind-the-scenes secrets of our wealth building strategy.

pin with us