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.

[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.

[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.

[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.

[Bailey Guns]

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

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