Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

Want to buy a home for $100? Is this what we can expect more of in the near future?

The fine print:

"The lucky winner will wind up shelling out much more than $100, because the Internal Revenue Service considers raffle prizes to be taxable income. In the case of a non-cash prize, such as Gray's home, the winner must pay 25 percent of the fair market value of the prize, minus the price of the raffle ticket. Since the fair market value of Gray's house is $280,000, the winner will owe the taxman $69,900.00.

"You can try to lower it based on the comps in the area," says Mario Piccolino, a Certified Public Accountant and owner of A&A Income tax, referring to the comparable home values. "But it's pretty much the fair market value."

Then the winner must pay a tax on the property to Arizona at 5.04% — another $14,112.00. Factor in $1,200 in annual property taxes and all the other expenses a homeowner incurs – insurance, utilities, upkeep and repairs— and that $100 ticket has become more than $84,000."

 
LoriKeet

Asked by LoriKeet at 12:51 PM on Feb. 20, 2009 in Politics & Current Events

Level 45 (194,908 Credits)
This question is closed.
Answers (12)
  • We must all be Patriotic and pay our taxes. hehe
    I expect a tax rate around 43% by the end of 2012.
    akinbottom2

    Answer by akinbottom2 at 12:58 PM on Feb. 20, 2009

  • The tax laws have always been like this. Win a car on the Price is Right, and you will owe taxes on the fair market value minus the cost of your ticket, and you can deduct your travel cost. Win a car at the casino or a big jackpot at the casino, you pay taxes on that too. This is not new. This is like 40 years old.
    Fiveofakind2

    Answer by Fiveofakind2 at 12:55 PM on Feb. 20, 2009

  • I know that! But raffling off your house is not something very common place. I guess I was just irked by her statement that "she just wants to be at zero, again." I mean, really, don't we ALL want to be debt free? She's only bought the house in late 2007, and is already over $350,000 in debt! Now we're supposed to take a $100 chance on being able to accrue over $84,000 of debt?! No thanks!
    LoriKeet

    Answer by LoriKeet at 1:01 PM on Feb. 20, 2009

  • But, if you look at the value of the house, and you just have to pay the taxes on it (and of course you win) it is a good investment.
    Fiveofakind2

    Answer by Fiveofakind2 at 1:03 PM on Feb. 20, 2009

  • If you go to your local courthouse and show up for the "tax sale" which should be held yearly, you can buy all the property you want for back taxes owed. This is how it's been done forever with the get rich quick scheme with landlording and flipping houses. But who has time?
    Anonymous

    Answer by Anonymous at 1:05 PM on Feb. 20, 2009

  • It's still a deal, taxes and all.
    MommyToSmeech

    Answer by MommyToSmeech at 2:08 PM on Feb. 20, 2009

  • Getting a $280,000 house for $84,000 is a good deal. The law has been around a long time, I hope the people buying the tickets would know this.
    LovemyQ

    Answer by LovemyQ at 3:00 PM on Feb. 20, 2009

  • Still pretty cheap for a house.
    Anonymous

    Answer by Anonymous at 3:03 PM on Feb. 20, 2009

  • Well, I guess those of you who think this is a "great deal" are either independently wealthy, or can afford to simply uproot yourself and your family if you were to win?


    You do realize that you will need to sell your current home/break the lease, quit your current job to find another one in the Mesa, AZ area, right? Because as you know, jobs are aplenty (sarcasm)!


    I guess I'm one of the few people who doesn't have any sympathy for those who are looking to be bailed out, because they didn't have a contingency plan in place when they bought their home.


    Why is it the responsible people have to pay for the 7% in trouble, many of whom bought houses they couldn’t afford? What’s the worst thing that happens if they don’t get bailed out....they join the 32% of Americans who are renters?


    http://angryrenters.com/

    LoriKeet

    Answer by LoriKeet at 3:43 PM on Feb. 20, 2009

  • Those who do these lotteries do not have to participate. If they did not do the research they are morons. An 84k for a 280k home is a steal. Those who would whine about it are the same kind of people who bought homes they could not afford and now expect those of us who were responsible to pay for them. We are a nation of whiners.
    Anonymous

    Answer by Anonymous at 4:27 PM on Feb. 20, 2009

close Cafemom Join now to connect to other members! Connect with Facebook or Sign Up Using Email

Already Joined? LOG IN