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Does anyone know what winning the green home would turn out to be tax wise for the winner?

Alright, so I did a little research... this is what I found, of course, everyone will be a bit different, but based on the numbers provided by the HGTV.com rules section, here are the different tax amounts:

Prize Total: 688,775 (Home, Car 100k option)

Filing Type : Taxes Owed

Married Filing Jointly : $210,943
Single : $218,385
Married Filing Sep. : $226,007
Head of Household : $215,006

I should note that all of that info is in relation to federal taxes only. I just checked out the state income taxes for Colorado and this is what I came up with:

Colorado income tax = 4.63% (flat rate in CO)
Prize Value = $688,775

688775 x .0463 = $31,890.28

This message has been edited. Last edited by: jasonwilczak,

Annual Property Taxes for Home and Car:

Colorado residential property assessment = 7.96%
Colorado other property assessment = 29%
Denver mill levy = 65.139
Home Value = $550,000
Vehicle Value = $38,500

Home Annual Tax Bill:
(550,000 x .0796) x .065139 = $2,851.79

Vehicle Annual Tax Bill:
(38,500 x .29) x .065139 = $727.28

wow, they should really work something out so the winner isn't screwed for winning. obviously they can't do anything about annual taxes but they should cover initial tax burden. I don't think it looks good for sponsors or network that only one person has ever taken the house because of the tax liability and then they had to sell later.

i think it would be better if the people that win actually get to live in the house.

so not one single winner of these homes actually lives in them!

I agree, it's a shame. I mean, the numbers I crunched aren't exact, but they're pretty close. Now, with some clever accounting and movement of funds and such, you may be able to alleviate SOME of the burden, but the IRS isn't going to let you get away "scott free".

I know that you can setup payment arrangements with the IRS if you owe them large sums of money. So, theoretically, you could spread the $210,000 initial tax on the winnings, over say, 30 years and treat it like an interest free home loan.

The benefit here is that you have 100k in cash and a fancy house and car, with no car payment and no mortgage to worry about, just a monthly IRS bill and no tax refund checks for 30 years. You would definitely have to be financially intelligent though, otherwise you could see yourself into a serious hole with the IRS, and like elephants, they never forget...

It surprises me that the sponser didn't include, or take care of, the tax burden for the winnings, I believe that it is an option for a prize giver to do and would relieve the burden from the winner.

I would suspect that by "giving" this all away, there is some type of financial benefit for the sponsor, so in a sense, they make a sweepstakes, give you less cash than the value and resale the items, as a giant publicity stunt.

If we win, my wife and I are seriously considering figuring out a way to disperse the initial tax burden over X years and make it work because we like the idea of Colorado. However, we will certainly consult with an accountant to determine if that is a possibility, otherwise, we, as many others who could win, will have no choice but the cash option.

This message has been edited. Last edited by: jasonwilczak,

"I know that you can setup payment arrangements with the IRS if you owe them large sums of money. So, theoretically, you could spread the $210,000 initial tax on the winnings, over say, 30 years and treat it like an interest free home loan."

I think that they still charge you interest and penalties with this and I believe that they go through your finances and make you sell off anything of value, except for your home. I am not sure if they let you keep a car, but they investigate your finances to see what can be salvaged in order to make payments towards the debt. I am not sure if this varies on a case by case basis, but this is what I understood from the IRS website.

That may be true, I'm not too sure of the details. I do know that both my mom and my friend's father owed a lot of money to the IRS, like 50k and 65k. They were able to keep everything they owned and came to payment arrangements with the IRS where a certain amount of money was deducted from their paycheck to cover the debt.

I could only assume that if you showed that you won a prize and owed more money that you had available they might work something out. Of course, I could be completely dillusional as well

quote:

Originally posted by jasonwilczak:
That may be true, I'm not too sure of the details. I do know that both my mom and my friend's father owed a lot of money to the IRS, like 50k and 65k. They were able to keep everything they owned and came to payment arrangements with the IRS where a certain amount of money was deducted from their paycheck to cover the debt.

I could only assume that if you showed that you won a prize and owed more money that you had available they might work something out. Of course, I could be completely dillusional as well

I really hope that it is true, this would possibly open up the possibility of the winner having a shot of keeping the home without having to have enough funds to come out of pocket with the full amount in such a short amount of time, not to mention having to come up with the annual taxes and insurance on top of that. Let's both keep our fingers crossed just in case either of us is the winner Did I mention that I really want this house...lol

This message has been edited. Last edited by: tangytwist,

[QUOTE]Originally posted by jhoee1:
wow, they should really work something out so the winner isn't screwed for winning. [QUOTE]

imho...
Over the years HGTV has proven its mettle in being sensitive to the winner's tax position. The cash option versus the accepting the Green Home property is a huge change over the years of the Sweepstakes.
HGTV has stated in the past that they don't expect a typical winner to keep the property/dwelling. The bigger issue, the practical issue is pulling up stakes, moving family to new schools and jobs, and HGTV is much aware.
Keeping the 500K+ home, no mortgage, would likely cost $1000+ a month, insurance, prop tax, maintenance/assoc type fees and utilities. Yes, electrical would be half the norm due to photovoltaic power, but gas heat, gas cooking and gas water heater need to be included in the utility total.
***I assume this home does not have elec heat, elec cooking and elec hot water, or it would not have been given such high LEED criteria, and would not have eliminated a MICROWAVE OVEN. Tourers, am I right?

An equity loan on the Green Home would get you tax money if you kept the property.

***I doubt the IRS would permit extensive tax-due delay and there would be interest due penalties, post Apr 15, 2012. They have your Sweepstakes property as a retainer until the taxes are paid as of the day the winner accepts the prize. This is different than when you have nothing in your pocket, something mentioned in post here. They can take this home as tax retainer since it is a prize and not your established primary dwelling.

Developers in the past have come back to the winner with an offer to purchase the property at tax due time, i.e. this year is Apr 2012, if you have not sold it by then; however, we have never been privileged to know details of any offer amounts, nor whether that option is available this Green Home.
Selling the Green Home at less than appraised value is also an option, lousy as it is, but would likely give the winner some profit. But really, not many MBers inquired about the taxes due upon taking this Green Home perhaps because of the cash offer alternative?

This is a sponsors' venue on a national scale, and HGTV gets extraordinary exposure via millions of entries. If there is a let-up in sight, we haven't been privy to it.
Good luck to all.

This message has been edited. Last edited by: TangoW,

is there a cash option for the green home? If so anyone know what it is?

Yes there is a cash option, it's in the rules section, i think around $645,000 off the top of my head.

Just checked it out, it's actually $618,775 if you choose the cash option instead of the title to the home.

quote:

Originally posted by Skimferella:
is there a cash option for the green home? If so anyone know what it is?

It is 480,0000 for the house, plus the $100,000. The remainder is the value of the car (around 38,775). I do not know if they will give you cash for the car if you do not want it.

quote:

Originally posted by tangytwist:
I do not know if they will give you cash for the car if you do not want it.

Cash has not been an option over the years.
One might sell it back to the dealer, but I believe, I don't know for sure, the dealer is in contract to provide title to the sweepstakes' winner that results, unfortunately, in a used car, and thus, less cash to the winner when selling it back to the dealer, of course. All that is in the documents the winner signs before being awarded the Sweepstakes' prize.
BTW, Colorado has no Fed Income Tax offset to reduce their state income tax due.
Utah does, and the 2012 Dream Home prize fed tax can be used to offset Utah state income tax.
Winners from states without state income tax, it was said here, are subject to Colorado state tax. That issue was not addressed by legal counsel here.

I should probably note here that I have absolutely no legal or accounting background... I just looked up the information and crunched the numbers based on the state and federal departments information sections. I am sure there are many ways to approach this situation, and yes, there are a few states that allow you to skirt by certain tax requirements, but I think (although I could be wrong) that the federal tax is unavoidable, and of course, is the most damaging.

quote:

Originally posted by TangoW:

quote:

Originally posted by tangytwist:
I do not know if they will give you cash for the car if you do not want it.

Cash has not been an option over the years.
One might sell it back to the dealer, but I believe, I don't know for sure, the dealer is in contract to provide title to the sweepstakes' winner that results, unfortunately, in a used car, and thus, less cash to the winner when selling it back to the dealer, of course.

I am not sure but I believe that the car that they bring with them is just for show and that the winners have to go to a dealership that HGTV selects and select/order their car.

This message has been edited. Last edited by: tangytwist,

quote:

Originally posted by jasonwilczak:
I should probably note here that I have absolutely no legal or accounting background...

Jas, we only had one chap with any credentials, CPA who was with us for a couple seasons. He had
extraordinary acumen on taxes and we had great fun reading the posts. But even he, like us all, claimed no final legal standing,
although no one ever had reason to doubt his statements of fact, being a proficient tax preparer and planner.
Personally, I got through income taxes each of the past twenty years with turbotax; that hardly scratches the surface but one does get a glossary of terms out of the experiences.
Some of the posters had up-front experience with the winners. A couple winners shared their experienes; way too few.
MBers usually come up with some pretty good stuff that arms them in the event of winning, and it appears that it does help get perspective, regardless. Thank youfor your posts in that regard.
We have had some marvelous people here and I hope that continues.
btw, a number of posters reached 25,000 posts in a few years and were/are still fun after all that.
But my favorite was the OBSERVER who sleuthed his way through the homes and picked out minutia with totally comical overtones. The items were creditable, never-the-less hilarious.
And if you lay out double entendres here, you have my fond attention, and a triple will send me into hysterica.
P.S. cher chez la femme!!!!

This message has been edited. Last edited by: TangoW,

Any type of prize requires tax as it is income. A prize is not a gift. The cash option gives winners an option if they can not afford to live there and you would have money left to use as you wish after tax payment. A blessing either way.

I have had the opportunity of visiting the dreamhome here in Sonoma, California and enjoyed it very much. I hope to see this greenhome on winners weekend, wouldn't it be fun?

Yes winners have lived in a dream home, one winner posts here from time to time. A winner many years ago also used theirs as a vacation home for a number of years.

I have enjoyed the dream and greenhome dream for many years and find it enjoyable. I love to see the winners surprised and to see them on winners weekend at their new home.

I would surely enjoy being the participant in such an adventure and perhaps would even be able to live in one.

I think the poster with the most posts I have known were between 10,000 and 14,000. Several years ago, they decreased many of us by several hundred or more that had been here a long time, but the fun part is expecting, sharing and wondering where the next greenhome will be or if you are the winner.

Just enjoy the dream, the design, the decor, and the location

enjoy the fun!

This message has been edited. Last edited by: nursejudy,

I am thinking BeachLady graced us with posts in the mid twenty thousands.

MBers had prose and jokes, don't you know, that would curl up your toes!
There were poems and rhymes one might dread.
I shudder to think we're becoming extinct,
that professorc ceased sharing coffee or tea!
that CPA has really called it a day...
and that MBers went twittering instead.

Cute tango

Nurses who come from Whitti-ay
never fail to make your day.

quote:

MarcusFlorence

I am not aware of Tax policies of Country as it differ from place to place.I don't think it will cost high for the winner of green house in the country.

Don't know what country you're referring to, Marcus. Guess it's all relative - the estimates above sounded high to me.

Somehow, I don't believe the IRS will allow you to finance the debt with them while you enjoy a vacation home, Jason. (Have a feeling your friends/relatives probably retained their personal residences.) Besides that, I've never heard of a state allowing anyone to "skirt" by?

If either of you can provide some data or additional info, please post again.

Thanks.

This message has been edited. Last edited by: AguaBella,

If I want to replace my boiler with an energy efficient Romulan disruptor, then it is up to me not the Government!
Actually I will do it myself and not tell anyone!

This message has been edited. Last edited by: AlexisSalazar,

When you switch your home over to one of the green energy homes in the area you will get tax breaks and you can even apply and get a grant to help with the

This message has been edited. Last edited by: Grafton,