from what i read in the entry rules, i gather that the winner is going to "wacked" with huge bills upon receiving the home and if you cant pay at that time you can forget about the house. this contest is definately not for the poor or lower middle class.
Originally posted by AprilEJ: is the home given away with taxes and insurance already paid. what would your guess be as to how much the taxes on the green home are per year?
AprilEJ, the winner is responsible for all the taxes and insurance. The whole prize value (house, furniture and car) is estimated to be $856,045 by HGTV and it will be considered income earned by the winner, so he/she will pay federal income taxes, regardless if he/she keeps or not the house; the income taxes are a one-time bill, NOT annual. Assuming the maximum tax bracket of 35% of the whole prize, the federal income taxes would be about $299,615 to be paid to the IRS on April 2009.
On the same date, the winner will also pay state income taxes if he/she lives in one of 41 states that have state income taxes. The maximum tax bracket varies by state; here in MD the maximum state income taxes are 5% so I would pay about $42,800 to MD.
If the winner does not have money to pay for the income taxes or does not want to move to SC, he/she can sell the house, pay the income taxes and still have some profit; it would be money the winner did not have before entering this sweepstakes.
After the income taxes are paid on April 2009, if the winner decides to keep the house the cost of living would include HOA fees ($400/month) plus annual property taxes and homeowners insurance. Here is an estimate for the annual property taxes:
quote:
Originally posted by TangoW: I may have this wrong... Property taxes in Jasper County are about .0115 per 100,000 assessed. On 700,000 valuation of the GH, it would be about $8000.
This message has been edited. Last edited by: ReginaRS,
Posts: 699 | Location: Maryland | Registered: Jan 13, 2006
Originally posted by TangoW: I may have this wrong... Property taxes in Jasper County are about .0115 per 100,000 assessed. On 700,000 valuation of the GH, it would be about $8000.
Regina, thanks for the consistent work in informing newbies. Regarding property taxes, they are paid by HGTV up to the end of '08, after which a non-homestead tax of perhaps $8000.00 would be due. We are hoping the MBer who is building in Traditon will comment on these topics as the Sweepstakes continues...
Posts: 1937 | Location: FL | Registered: Jan 08, 2003
i would think part of the cost basis of the total prize is the furnishings & the amt apportioned to the 'creative' side,,, eg - the carter table's only a table made from recycled wood which any competent diy'er can do,,, however, the 'artisan's fee' might add immeasureably to the cost,,, same w/other interior 'artsy' furnishings,,, i'd expect the interior designer also added a %age.
,,, even i can't get 5gal of wtr into a 4gal bucket
Originally posted by Just Spiffy: I apologize if this has already been asked, but can the home be rented out? Spiffy
Welcome Spiffy! Home Owners Association rules usually specify that a home can be rented/leased on no less than a one year basis. As far as I know this HOA hasn't revealed any rules to any of the visitors. If you would be selling before April 15,'09 it appears you wouldn't have a year left to rent under those rules. A relative might be able to occupy during that time and provide unspecified support for their doing so, I should think.
This message has been edited. Last edited by: TangoW,
Posts: 1937 | Location: FL | Registered: Jan 08, 2003
YesIt'sConcrete, Carter's table is described as a gift. If that is accurate, there will be no taxes to the winner for that item.
$100,000 minus the cost of the Yukon leaves the amount that is for the furnishings. Subtract all of the appliances (unless those are included in the house value?) and the custom-made Cisco furniture, and I guess the winner is just paying for the items, not including a designer's fee. But I'm just guessing.
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Posts: 3723 | Location: Northern California | Registered: Aug 17, 2004
Originally posted by Lindi: YesIt'sConcrete, Carter's table is described as a gift. If that is accurate, there will be no taxes to the winner for that item.
$100,000 minus the cost of the Yukon leaves the amount that is for the furnishings. Subtract all of the appliances (unless those are included in the house value?) and the custom-made Cisco furniture, and I guess the winner is just paying for the items, not including a designer's fee. But I'm just guessing.
Yukon is a separate $50k+... I know it's hard to believe, but those second hand junk furnishings supposedly adds up to ~$100k... I have my doubts it would bring half that at auction...
The home is valued at approximately $700,000 (includes structure, lot, and landscaping) as of 2/1/08.... Actual value depends on market fluctuations.
Furniture and accessories: $100,000.00 and
2008 GMC Yukon Hybrid:$56,045.00.
The description of the home doesn't specify appliances, just the "structure." So I hope the appliances come under the $100,000. There is still no way so many "repurposed furnishings" in this house could wind up costing the identical amount of the DH furnishings. Maybe it was inadvertantly copied from the DH rules. I like to hope so.
If not, I wonder how hard it would be to challenge the value of designer expertise to the IRS.
This message has been edited. Last edited by: Lindi,
~♥~♪~♥~ "We are the music-makers, And we are the dreamers of dreams."
Posts: 3723 | Location: Northern California | Registered: Aug 17, 2004
Originally posted by Lindi: Ack, you're right. Abbreviated from the rules:
The home is valued at approximately $700,000 (includes structure, lot, and landscaping) as of 2/1/08.... Actual value depends on market fluctuations.
Furniture and accessories: $100,000.00 and
2008 GMC Yukon Hybrid:$56,045.00.
The description of the home doesn't specify appliances, just the "structure." So I hope the appliances come under the $100,000. There is still no way so many "repurposed furnishings" in this house could wind up costing the identical amount of the DH furnishings. Maybe it was inadvertantly copied from the DH rules. I like to hope so.
If not, I wonder how hard it would be to challenge the value of designer expertise to the IRS.
I believe DH was $150k for furnishings stuffing ~3500SF and gh is $100k for stuff in 2000SF... Probably similar major appliance costs... Still Ethan Allen versus flea market cast offs makes the $100k seem very high to me... I wonder if one of the documents hgtv has you sign to accept your winnings is that you won't challenge their valuations?! Arghh
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Posts: 3808 | Location: Whittier, California | Registered: Mar 23, 2005
Just a comment: whoever wrote it wrongly described the taxes as "sales taxes"; in fact, the winner will not pay any sales taxes, but federal income taxes.
And if the $700K in the article are correct, the winners will pay even less than what had been calculated by CPA/PFS, a certified CPA that every year calculates the income taxes on the Dream Home. He had estimated the federal income taxes would be about $772K.
Here is his tax thread on the Islamorada Dream Home for complete information: DH Taxes thread
This message has been edited. Last edited by: ReginaRS,
Posts: 699 | Location: Maryland | Registered: Jan 13, 2006
Those taxes are far more palatable than the DH taxes.
I think if I won, I'd sell to my parents because they don't live too far. Then the family could use it for vacations. That'd be cool. Maybe mom and dad would just retire there.
It is a fine house. It would be a neat one to live in, if the winner could afford it.
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Posts: 3808 | Location: Whittier, California | Registered: Mar 23, 2005
I would really want to be able to live in the house if I won. Of course moving to SC would be a huge change, but one I feel I would like to attempt at this point in my life. Reading the posts makes me wonder if I could manage it financially however...I sure would give it my best--and get an accountant and realtor right away to help me out. Good luck to all--
Originally posted by Lindi: YesIt'sConcrete, Carter's table is described as a gift. If that is accurate, there will be no taxes to the winner for that item.
$100,000 minus the cost of the Yukon leaves the amount that is for the furnishings. Subtract all of the appliances (unless those are included in the house value?) and the custom-made Cisco furniture, and I guess the winner is just paying for the items, not including a designer's fee. But I'm just guessing.
Yukon is a separate $50k+... I know it's hard to believe, but those second hand junk furnishings supposedly adds up to ~$100k... I have my doubts it would bring half that at auction...
If the repurposed furnishing were custom made for the home they can cost that much easily.Just look how much more recycled floors
Many of us would have to sell, to raise money to pay the taxes. Are you saying you can't "sell" for $1 to try to avoid taxes? That's true of course.
