man wins home irs wont let him have it.. (1 Viewer)

Det. Brees

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every year here st. judes has a home they give away last year the home was worth 375k.
the man that won the home has not moved into the home yet.
you ask why
the irs says he has to pay 172k in taxes before they will give him the keys... and thats just the fed taxes he has to pay another 7% for state tax. both the state and the feds claim its a cash prize and not property which causes it to be in a higher tax bracket...

its been on the news here because they are giving away another home here tomorrow.
i was hopeing to win this year. the house is a 500k home. and only 10,000 tickets were sold. each ticket cost $100.00
 
every year here st. judes has a home they give away last year the home was worth 375k.
the man that won the home has not moved into the home yet.
you ask why
the irs says he has to pay 172k in taxes before they will give him the keys... and thats just the fed taxes he has to pay another 7% for state tax. both the state and the feds claim its a cash prize and not property which causes it to be in a higher tax bracket...

its been on the news here because they are giving away another home here tomorrow.
i was hopeing to win this year. the house is a 500k home. and only 10,000 tickets were sold. each ticket cost $100.00


so do the math....roughly 45.8% federal tax based on first scenario leaves you with $229,000 in federal tax. Now do you hope to win?
 
Just sell the house, pay the tax, and put what's left over on the hard eight at Harrah's.
 
The same thing happened to a lady in New Orleans, (really Harvey, LA - westbank). She won a home through an event, though not that expensive ($175k), and because she could not pay the taxes upfront, she was not allowed to move in. I did not follow the story, so I don't know how it all ended up.
 
That doesn't make sense. A friend of ours just won a house in Ponchatoula through St. Jude. The taxes were $65,000.00. She took out a home equity loan, paid the taxes and now how a small mortgage on a "free" house. She moved in last week. Those stories have to have more to them.
 
That doesn't make sense. A friend of ours just won a house in Ponchatoula through St. Jude. The taxes were $65,000.00. She took out a home equity loan, paid the taxes and now how a small mortgage on a "free" house. She moved in last week. Those stories have to have more to them.

The roadblock here would be if an individual has a poor credit history. This will either prohibit them from taking out a loan that large, and if approved, the interest rate would be ridiculous. To me, it would make the most sense to take out a loan to pay the taxes, if the person can do so.
 
You shouldn't have to pay taxes on something won this year until next April 15th.
 
I think that's what he was suggesting? Use the home equity loan to pay the taxes on home that is being equitized (heh, made up word).

I know - I was agreeing with him, but just trying to get the point across that all are not able to do so, based on credit history.
 
You shouldn't have to pay taxes on something won this year until next April 15th.

Wrong. There is withholding done for winnings over 5k that occurs after 3/4 of this year or a bet that pays off more than 300 times the wager. The withholding is 25%.
 
No tax on winnings up here. Of course, that means you'd have a house up here... its snowing RIGHT NOW... blizzard like conditions... guess I'd be willing to pony up some ridiculous tax money for a "free" house.
 
I know - I was agreeing with him, but just trying to get the point across that all are not able to do so, based on credit history.

You'd be hard-pressed to find a bank that WOULDN'T write you a 175k loan on a 375k house no matter how bad your credit is. That's the best part about a house.. it's its own collateral. I've seen 80 year old people with bad credit put down a large down payment and get a house. I think this dude figured it was gonna be FREE free. :)
 
Why should you have to pay taxes on something you won?? You didn't buy it, you won it. Just like the inheritance tax, someone already paid taxes on that money now you have to. I don't know about this country sometimes.
 

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