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

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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...
 
southland22 said:
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...
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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?
 
UncleTrvlingJim said:
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?
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If he cannot take up residence, is it still his primary home?
 
In this instance though would that house be considered his primary home? I bet the IRS would argue since he never lived in it that it is not. Therefore it would not be a taxfree transaction. Also, isn't the 500k on married filing jointly? So if if he is single (didn't see a link), then it would only be 250k.
 
UncleTrvlingJim said:
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?
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Because he has to pay taxes in the first place.

Winnings should be just that. Winnings and not taxed.

Of course, I am for a complete revamp of the tax system altogether.
 
this is not his primary home. he still lives in his first home. when he sales the property he won he has to pay taxes on that because its not his primary. im not assking anyone to feal bad for him. im complaining about how our tax system is screwed up.

i get these figures from the news.. granted the news is not always correct. there statement was if he sales the propert and pays all the taxes for the prize and then for the income tax i think is what they said it would go under if he sales the home"not sure" the the realtor fees he would make like 40k now thats is insane for someone that WON a 400k home..
 
southland22 said:
this is not his primary home. he still lives in his first home. when he sales the property he won he has to pay taxes on that because its not his primary. im not assking anyone to feal bad for him. im complaining about how our tax system is screwed up.

i get these figures from the news.. granted the news is not always correct. there statement was if he sales the propert and pays all the taxes for the prize and then for the income tax i think is what they said it would go under if he sales the home"not sure" the the realtor fees he would make like 40k now thats is insane for someone that WON a 400k home..
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Quit voting D and R and things will change because it all goes back to the people we put in.

This voting for the lesser of 2 evils would stop if more people would "throw away their vote" . That mentality is what the 2 ruling parties in this country wish you to have.
 
You have to live in a home for 2 out of 5 years for it to be considered your primary residence.
 
If he has not been able to take possession, has he been granted the deed already? If not, sell the rights (winning ticket) for $100k and let someone else worry about paying the taxes.
 
My sister-in-law did the dash around town promo contest held by a radio station in Shreveport a few years ago and won a new Ford Probe GT.

It was at Christmas time. My brother had to add the sticker value of the car to his income for the year...$22,000.

That pushed his income up by so many tax brackets and it was too late in the year for him to adjust for it.

Yep, he paid the IRS half the cost of the car on his taxes that year and had to borrow money to do that.

Their son was starting college, so my brother took the view that he bought the kid a Probe GT at half price. :hihi:
 
If he own another house, why doesn't he just sell that one to pay his taxes?

I'd rather tax gambling winnings than income.
 
UncleTrvlingJim said:
If he own another house, why doesn't he just sell that one to pay his taxes?

I'd rather tax gambling winnings than income.
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What are the odds that if he owns a house, that he would have enough equity in it to even pay off the taxes on the new one? The tax system in this country is so ridiculous it is sickening.
 
There is more to this story. Too many blanks. Is there an article or something?
 

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