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)
How are we supposed to feel bad for him?