well get this.. he owes 172k but if he sales the home for say 400k he has to pay tax on that and it would be like 190 k. the poor guy only make like 40 k on a 400k home.... this is so wrong...
Huh? If he owns a house now, he can sell that, and use the money to pay the taxes on the house he won (remember, the first $500K of profit on the sale of your primary home is tax free). If he doesn't own a home currently, he can take out an equity line of credit against the home he won, and pay the taxes with that... effectively giving him a 400K house for only 172K. If he has bad credit and does not own a home, he can sell the house he won and pay the 172K in taxes he owes, and that's it... he would walk away with 228K dollars. (remember the first $500k of profit on the sale of home is tax free)