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Man Wins Free Dream Home, Can't Afford Sales Tax
nbc5i ^

Posted on 07/05/2002 8:52:50 PM PDT by chance33_98


Man Wins Free Dream Home, Can't Afford Sales Tax
Winner Hopes To At Least Spend A Week In Home

POSTED: 11:22 a.m. EDT July 5, 2002

SHERWOOD, Md. -- There's no such thing as a free lunch or a free house.

That's what Milton O'Bryant is learning. He's won $1 million designer beach house on the Maryland shore, in a promotion for the House and Garden TV cable channel. But while the house hasn't cost him a cent, O'Bryant owes taxes on his lucky break.

He said he would have to take out a $500,000 mortgage just to pay the state and federal tax bills. Instead, the Texas police supervisor will put the dream home up for sale.

O'Bryant hopes his family will at least spend a vacation week in the house before the new owner takes over.


TOPICS: Front Page News; Government; Miscellaneous
KEYWORDS: dreamhome; salestax
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Comment #21 Removed by Moderator

To: VA Advogado
I would bet on you winning the home.
22 posted on 07/05/2002 9:10:11 PM PDT by RedBloodedAmerican
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To: RedBloodedAmerican
I would bet on you winning the home.

I could probably keep a TV show longer too. :)

23 posted on 07/05/2002 9:14:33 PM PDT by VA Advogado
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To: VA Advogado
Just don't wear a sweater from Mr. Rogers' prop box.
24 posted on 07/05/2002 9:15:49 PM PDT by RedBloodedAmerican
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To: chance33_98
This would be tax on income just like a lottery winner.

My first year as a stock broker I won a free cruise. Turns out it was considered imputed income and was therefore taxable so my free cruise cost me $ 2,000 in income tax. I learned my lesson about free stuff.
25 posted on 07/05/2002 9:17:03 PM PDT by Beernoser
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To: BlessingInDisguise
You know when those publisher's clearing house winners win $100 million they've really only won about $40 million after taxes.

Depends on where you live. The top federal income tax rate is 38.6% now, although some income around the 300K range (if you are single) is effectively taxed at a slightly higher rate due to phasing out of deductions.

If you are fortunate to live in a state with no income tax (like Texas), you are looking at a maximum bite of about 40%.

26 posted on 07/05/2002 9:17:16 PM PDT by justlurking
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To: RedBloodedAmerican
But Keyes wants to do away with the income tax, etc.
27 posted on 07/05/2002 9:18:52 PM PDT by brat
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To: JavaTheHutt
50%........geesh!!
28 posted on 07/05/2002 9:22:34 PM PDT by Husker24
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To: BlessingInDisguise
Nowadays they apply a massive amount of taxes when you win ANYTHING

I heard a radio interview with the producer of "The Price Is Right" TV show. I believe he said about half the people cannot afford to pay the taxes if they win a car on the show, and while some already own nice enough cars that they can sell to pay the taxes so that they can keep the new car they "won", many have to immediately sell the car to pay the taxes, though he says they try to get the dealers who supply the cars (they get the cars through a dealer near the winners home) to try to work out any resales of the car for the winner so they (the winners) don't get "worked over" too much on the deal.
29 posted on 07/05/2002 9:26:46 PM PDT by BansheeBill
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To: VA Advogado
"I could probably keep a TV show longer too."

Weren't you the tranny hooker on 'Cops'?
30 posted on 07/05/2002 9:27:38 PM PDT by headsonpikes
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To: RedBloodedAmerican; headsonpikes
Just don't wear a sweater from Mr. Rogers' prop box.

I'll wear HOP's inmate garb.

31 posted on 07/05/2002 9:46:15 PM PDT by VA Advogado
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To: VA Advogado
"I'll wear HOP's inmate garb."

You always admired my style, didn't you, uh...was it 'Sweetcheeks"? ;^)
32 posted on 07/05/2002 9:56:44 PM PDT by headsonpikes
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To: justlurking
Income tax? I'm talking about that insane tax they put on things you've won. I think it's like over half.
33 posted on 07/05/2002 9:57:21 PM PDT by BlessingInDisguise
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To: VA Advogado
First let me say that I do not live in Maryland.

Maryland may have "deed stamps" you must purchase based on the dollar amount of the real estate when the deed is transferred at the Register of Deeds' office. Sales tax with a different name. It's still sales tax.

Beginning the day that the title is transferred taxes will be due for the amount of time the "winner" owns the home until he sells it. That too could be a few more thousand it cost to win this "prize". Especially if it doesn't move in a very few weeks.

How much will he pay in fees? Accountant, lawyer, grass mowing, somebody to check for break-in, utilities, insurance, on and on. Really more taxes in themselves because you are pretty well forced into these expenses.

How much in penalties will he pay if he doesn't have the tax money now?

He may well have to reduce the price to remove this albatross from his neck. That cuts dollar for dollar from his taxed winnings. Depends on million dollar home market and luck in finding a sucker.

HGTV did sort of warn people who entered. But the only people who could afford to win the home were probably extremely small in the number of entrants. When it is all taken care of I'll bet this family won't even buy a volunteer fire department raffle ticket for fear of winning.

34 posted on 07/05/2002 10:02:34 PM PDT by doglot
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To: VA Advogado
I'm sorry. I thought sales tax meant sales tax.

Not when some 20 yo journalism student writes the headline.

35 posted on 07/05/2002 11:36:14 PM PDT by cinFLA
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To: chance33_98
It probably is Income Tax. The value of the house is his winnings! Just like he won that amount of money, he would have to pay the Federal Government the taxes on that as "income".
36 posted on 07/05/2002 11:36:57 PM PDT by blondee123
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To: chnsmok
Home sales are taxed in Washington state.

Yes, but only at the excise tax rate (just under 2%) rather than the more onerous sales tax rate of nearly 8% (depending on where you are). Still, a million dollar home would result in nearly $20,000 in tax, however, the tax is customarily paid by the seller in real estate transactions. Also, no state income tax here, this winner would only have the federal income tax burden to worry about.

Still, if the home was really worth a million dollars, and it took half a million to pay the state and federal income taxes, I cannot imagine a lender not being willing to lend 50% of the home's value, no matter what the ability of the borrower to repay. The payments would be pretty steep, but chances are good that the home could be rented out for a period of years, until the winner's income caught up to the ability to make the payments. Just depreciating a house that expensive would generate some tax breaks to offset some ordinary income. This winner needs to see a good CPA.

37 posted on 07/05/2002 11:55:04 PM PDT by hunter112
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To: chance33_98
Wow, this is disgusting almost beyond belief. Where are my pet statists from War on (Some) Drugs threads to talk about how great everything the government does is?
38 posted on 07/05/2002 11:56:26 PM PDT by Jonathon Spectre
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To: chnsmok
Home sales are taxed in Washington state.

and the seller normally pays. I took quite a beating when I sold my home in Vancouver, Washington last year. Fortunately, I sold just before the market dived, or it would have been even worse.

39 posted on 07/05/2002 11:59:49 PM PDT by arm958
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To: arm958
and the seller normally pays. I took quite a beating when I sold my home in Vancouver, Washington last year

But wait, you must be mistaken, that goes against the GOP grain of "the consumer always pays".

I'm sure there'll be a GOP spokesperson along any minute with a clear explanation of the error you made.

40 posted on 07/06/2002 12:19:24 AM PDT by lewislynn
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