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Old 08-19-2006, 02:09 PM   post #1 of 4
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Default St. Jude Dream Home

Instead of just writing a check to St. Jude's my wife and I have been buying tickets to the annual Dream Home raffle. This years home here is valued at $300,000. Last year's winners never moved into the house they won and it has been sitting empty ever since last October, with a "For Sale by Owner" sign in the yard. I got to wondering about the tax implications of winning. From what I read it would be taxed as income and the taxes would have to be paid on transfer of the deed to the new owner. The hit here would be 32%- 28% fed and 4% state. That's a $96,000 bite just to get in the place! Then if you never live in it and sell it aren't there capital gains taxes to be paid? That would be another $96000 to get out of the house. Yikes! I guess you'd still be over $100,000 ahead after all was said and done if you didn't go bankrupt first. I never win anything so all these taxes aren't going to be a problem for me. I was just thinking about how it worked. Hutch
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Old 08-19-2006, 02:40 PM   post #2 of 4
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Default Re: St. Jude Dream Home

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Originally Posted by Hutch001b
Instead of just writing a check to St. Jude's my wife and I have been buying tickets to the annual Dream Home raffle. This years home here is valued at $300,000. Last year's winners never moved into the house they won and it has been sitting empty ever since last October, with a "For Sale by Owner" sign in the yard. I got to wondering about the tax implications of winning. From what I read it would be taxed as income and the taxes would have to be paid on transfer of the deed to the new owner. The hit here would be 32%- 28% fed and 4% state. That's a $96,000 bite just to get in the place! Then if you never live in it and sell it aren't there capital gains taxes to be paid? That would be another $96000 to get out of the house. Yikes! I guess you'd still be over $100,000 ahead after all was said and done if you didn't go bankrupt first. I never win anything so all these taxes aren't going to be a problem for me. I was just thinking about how it worked. Hutch
That pretty much sums it up. However you could get a mortgage to pay the taxes.
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Old 08-19-2006, 03:06 PM   post #3 of 4
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Default Re: St. Jude Dream Home

Or declare yourself to be a member of the clergy and avoid the tax?
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Old 08-19-2006, 04:18 PM   post #4 of 4
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Default Re: St. Jude Dream Home

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Originally Posted by Hutch001b
Yikes! I guess you'd still be over $100,000 ahead after all was said and done if you didn't go bankrupt first. Hutch
id guess, you'd still have to pay 6% to the realtor to sell it... 6% of 300K = 18K so your down to 82K Still a great prize...
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