Taking a BIG chance?

[BlasterBob]

We keep seeing the TV ad's for the St. Jude "Dream Home" to be raffled off soon. The chances cost $100 each and that money goes to the much needed St. Jude Hospital fund. Now, since we are retired folks living on a meager little income and don't have a lot of $'s, what happens if WE were to really beat the odds and win this $400,000 plus home in Castle Rock. Our chance of winning this home is damn near ZERO but I am wondering if a little nobody without much (any) money wins, how does the TAX thing work. I have absolutely no idea about taxes where you big city boys probably are well versed in such matters. Would the winner of the home need to pay taxes on the value of that home in the same year that it is won in? Even if the winner would donate the entire home BACK to the St. Jude Hospital system, he's still liable for the amount of the house that he just won.
I am thinking of scrapping the entire idea of even taking a chance on winning just because of the TAX possibilities. Yeah, the winner could certainly put the house up for sale immediately but with the Obama mess, the house could possibly not sell for years and there would be some serious taxes to consider.......??????????

[Zundfolge]

The tax bill is much less than the value of the home so you can probably take out a mortgage on it that would be much less per month than what you'd have to pay if you bought it. Or you could sell the house, pay the taxes and pocket the rest.

I still contend that there should be no income taxes on gifts or contest winnings.

[rondog]

I have no experience and I'm not a lawyer, but I knew somebody once that won a car and had to sell it immediately to pay the taxes on it. Always been my opinion that unless you can afford the taxes, you're better off NOT winning anything except a large amount of cash. A large, valuable prize is the same thing as income to the IRS, as I understand it. JMHO of course. Best advice would come from a lawyer.

[OneGuy67]

Right now, the housing market in the southern Denver/Centennial/Highlands Ranch/Castle Rock area is pretty good with the average house being on the market for only a few weeks. My mom wants to downsize from her big house in that area and there are limited homes for her to look at.

[sbouslog]

Gone

[BlasterBob]

The tax bill is much less than the value of the home so you can probably take out a mortgage on it that would be much less per month than what you'd have to pay if you bought it. Or you could sell the house, pay the taxes and pocket the rest.

I still contend that there should be no income taxes on gifts or contest winnings.

At my age of 75, with the only income being a little Railroad Retirement check and a former employers tiny retirement income, I'd hate like hell to have to start a mortgage payment system and make any monthly payments other than for our current expenses of utilities, Ins., etc.,etc.,etc.
Yes, the idea of immediately selling the newly won house and pay the taxes is nice but the house may not sell for years, in the mean time, there would be some hellish taxes and mortgage payments to have to come up with! We do manage to currently live within our means!!!!!
I agree, would be nice to not have to pay income taxes on contest winnings but they have got us with their (actually - our) tax laws. [Bang]

[TFOGGER]

I'm willing to take a $100 chance (for a good cause!). With carryover losses, etc., the tax burden would be bearable.

[Wulf202]

don't take possession until 2013 and you would have 15months to deal with the taxes of selling! I could also get it fee managed for you with a couple of calls. it'd be hands off rental making well over the mortgage on the taxes so you'd have it payed off in about 5 years

[BlasterBob]

don't take possession until 2013 and you would have 15months to deal with the taxes of selling! I could also get it fee managed for you with a couple of calls. it'd be hands off rental making well over the mortgage on the taxes so you'd have it payed off in about 5 years

Five (5) years??? Hell, I'll probably be pushing up some sod in five years.[Tooth]

[Bailey Guns]

Five (5) years??? Hell, I'll probably be pushing up some sod in five years.[Tooth]

That's too bad...but you could always leave it to me!

[Coffee]

[Wulf202]

Five (5) years??? Hell, I'll probably be pushing up some sod in five years.[Tooth]

I'm planning a weekend at bernies style going away party so you need to last about that long.

And sod? I thought you'd get cremated and mixed with some fff for a grand send off? That's the way I'm going....

[BlasterBob]

And sod? I thought you'd get cremated and mixed with some fff for a grand send off? That's the way I'm going....

Oh yeah, I still have all the preparations made for that real BLAST OFF with the propellant of FFFG. All the ashes won't fit in the BP shooter so some will still go in a very inexpensive urn to go "under the sod". I am really not very anxious for all that to happen but what the hell, gotta be prepared.[Tooth]

[Wulf202]

Ran the numbers again, if you rented it for $3,000 a mo which is easily within the comps and financed for 105k You'd have it paid off in 3.5 years or so.

[rockhound]

Actually you cann move right in and enjoy it, if you are over 62 and it is to be your primary residence, take a reverse mortgage to pay the taxes and live in the home until you die your heirs will get a home that they can then sell and take the profits over and above the principal on the reverse,

There should even be enough money left over after the taxes to have additional income on a reverse mortgage to be a nice monthly boost in your income you could actually add all that free equity to your retirement with a reverse mtg. And you can never lose the house and you never pay back the money until the house is sold long after you are gone

[Irving]

Actually you cann move right in and enjoy it, if you are over 62 and it is to be your primary residence, take a reverse mortgage to pay the taxes and live in the home until you die your heirs will get a home that they can then sell and take the profits over and above the principal on the reverse,

There should even be enough money left over after the taxes to have additional income on a reverse mortgage to be a nice monthly boost in your income you could actually add all that free equity to your retirement with a reverse mtg. And you can never lose the house and you never pay back the money until the house is sold long after you are gone

That's actually a decent way to use a program that otherwise sounds like a giant rip off.

[sniper7]

I'd still do it. Basically getting a house for 75% off. sell your current house or rent it out. If you own it outright without a loan, the rent from that one would easily pay your new house mortgage. win-win. either way you can look at it at winning $300K after taxes roughly. pretty damn good in my book.

[Waywardson174]

Thanks to Colorado law, residential taxes are super low in Colorado compared to many other states. The total revenues generated must come out to 55% Commercial/45% Residential.