Visualizing Data to Promote Better Public Policy

            FB-icon.jpg Twitter-Icon.jpg G-Icon.png

Estimating the Tax Impact of Winning the 2014 diy Lakeside Blog Cabin

Nov 25, 2013


diy_network_2014_Blog_Cabin_in_Winter_Haven_Florida.jpg

One of the fun and popular articles I wrote on my previous blog, Wealth Alchemy, was to estimate the tax impact of winning a home via HGTV or diy network. While winning such a home may seem to be a dream come true, the reality is that it often turns into a tax nightmare.


It was just announced that this year's diy network 2014 Blog Cabin will be in Winter Haven, Florida. The good news is that it is in Florida which does not have an individual income tax so there will be no state tax bill for winning this home. Florida also has the eighth lowest tax burden in the country. [Update: There would be no state income tax bill if the winner lives in Florida or other state with no income tax. Otherwise, the state income tax is indeterminate since we need to know the winner's state of residency. See comments for more information.]


That being said, it's really the federal tax bill that is the whopper. While we don't yet know the details of the giveaway, the winner is often provided two ways to pay the tax bill.


  • First, part of the prize is cash which, after-tax of course, can be used to pay taxes. 


  • Second, there is often a cash in-lieu of the house which the winner can take--with this option the winner can simply take the cash and run, again, after paying taxes on it.


To provide some context on the size of the estimated tax bill, just look at the one of the last giveaway in Florida--the 2012 HGTV Urban Oasis Giveaway in Miami, Florida. The federal individual income tax bill alone came to a whopping $274,900. If you plan on keeping the home, best be prepared to take out a home-equity loan to pay Uncle Sam since the giveaway did not include any cash.


Fortunately, HGTV did provide an escape hatch by offering $750,000 in lieu of taking possession of the home. If the winner opts for this choice, they will take home $527,701 free-and-clear after paying income taxes of $222,400.

Other examples included:

 




Oh, and keep in mind that this does not include your property tax bill which you will have to pay year, after year, after year . . . well, you get the picture. Fortunately, the Tax Foundation's property tax calculator shows that Polk County's (where Winter Haven is located) has an average tax burden as a percent of the median home value at 1.04 percent. Though on a million dollar home that can add up quickly.


As soon as the details of the giveaway are made public, we will post our estimate of the tax bill that will be due. In the meantime, check out diy's announcement video . . . and start saving now to pay your tax bill if you plan on entering the contest.

 



Category: Tax Burdens

J. Scott Moody

J. Scott Moody has over 17 years as a public policy economist with a specialty in tax policy and has over 170 publications. He has worked for numerous national and state-based think tanks such as State Budget Solutions, Tax Foundation, Heritage Foundation, and The Maine Heritage Policy Center.


Have all of our posts at Key Policy Data delivered to your inbox!

Enter your email address:

Delivered by FeedBurner

 


 

Click Here to Calculate
Your Income Tax!

 



Check Out Our Unique Apps:

Government Workforce App

Tax Burden App

Cost of Living App

Federal Taxes and Cost of Living App

Check Out All Posts For Your State:

Alabama

Alaska

Arizona

Arkansas

California

Colorado

Connecticut

Delaware

Florida

Georgia

Hawaii

Idaho

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

Nebraska

Nevada

New Hampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

West Virginia

Wisconsin

Wyoming

Have all of our posts at Key Policy Data delivered to your inbox!

Enter your email address:

Delivered by FeedBurner

Category List


Tag List

Cross-Border Shopping (3)
Maryland (2)
Jock Tax (1)
Sales Tax (1)
Marginal Tax Rates (1)
Rhode Island (2)
Government Employment (44)
Alaska Policy Forum (1)
Individual Income Tax Cuts (1)
Massachusetts (2)
diy 2014 Blog Cabin (2)
Social Security Reform (1)
Insurance Premiums (1)
ALEC (1)
Vermont (2)
Arkansas (2)
James Buchanan (1)
Idaho (1)
Oklahoma Council of Public Affairs (1)
HGTV 2014 Dream Home (1)
Tax-Rates.com (1)
Income Tax (1)
Progressive Individual Income Tax (1)
Louisiana (2)
Gross Receipts Tax (3)
Federal Income Tax Liability (2)
Michigan (2)
Johnny Manziel (1)
Healthcare (1)
South Carolina (2)
Texas (3)
Missouri (2)
U.S. Census Bureau (2)
Ohio (5)
Fix SS Now (1)
California (6)
Minnesota (2)
Local Individual Income Tax (1)
Oregon (2)
2014 HGTV Dream Home (1)
Virginia (2)
Georgia (3)
Proposition 13 (2)
Atlas Van Lines (1)
Property Tax (3)
Nebraska (2)
Wisconsin (2)
Kansas (2)
Oklahoma (2)
Alabama (2)
Public Choice Economics (1)
Individual Income Tax Burden (2)
Employment (1)
New Mexico (2)
Tax Collections (1)
Washington (2)
Individual Income Tax Calculator (1)
Iowa (2)
Manhattan Institute for Public Policy Research (1)
Obamacare (1)
Florida (3)
Tax Exporting (4)
Schaffer's Mill (1)
South Dakota (2)
Washington, D.C. (1)
Tennessee (2)
California Income Tax Burden (1)
Tax Cuts (1)
Proposition 2 1/2 (1)
Dr. Arthur Woolf (1)
Permanent Wyoming Mineral Trust Fund (1)
Hydraulic Fracturing (2)
Buckeye Institute (1)
Tax Foundation (13)
Wyoming (3)
Delaware (2)
Tax Burdens (53)
Joe The Economist (1)
Nevada (2)
Municipal Individual Income Tax (1)
Property Taxes (1)
Arizona (1)
Severance Taxes (4)
Kentucky (2)
diy network (2)
Government Workforce (47)
Free-Stater (2)
Wyoming Taxpayers Association (1)
Severance Tax Permanent Fund (1)
Connecticut (3)
Transparent Nevada (1)
West Virginia (2)
Taxes Matter (2)
New York (3)
Migration (1)
Coal Severance Tax Trust Fund (1)
Lake Tahoe California (1)
HGTV 2014 Smart Home (1)
Colorado (2)
Illinois (2)
Indiana (3)
Winter Haven Florida (1)
Utah (2)
Government Compensation (44)
Alaska (4)
2014 Blog Cabin (1)
Government Wages and Salaries (44)
North Carolina (3)
Montana (2)
Tax Reform (2)
Maine (1)
Unincorporated Business Tax (1)
Know Your Rates (1)
North Dakota (4)
New Jersey (2)
Social Security (1)
Act 60 (1)
Hawaii (3)
Daniel DiSalvo (1)
Pennsylvania (2)
Local Option Sales Tax (1)
Mississippi (1)
Manufacturing (1)
Federal Income Tax Burden (3)
Tax Havens (1)
Gordon Tullock (1)
New Hampshire (3)
Government Benefits (45)
2013 Migration Patterns (1)

Tag Cloud

West VirginiaDaniel DiSalvoCoal Severance Tax Trust FundALECNew HampshireSouth DakotaProposition 13James BuchananHydraulic FracturingCalifornia Income Tax BurdenSchaffer's Mill2014 Blog CabinTax ExportingOregonIowaKnow Your RatesGovernment EmploymentTax ReformNevadaConnecticutAlaskaHGTV 2014 Dream HomeProperty TaxesMinnesotaProgressive Individual Income TaxJohnny ManzielObamacareWinter Haven FloridaMigrationSeverance TaxesGovernment CompensationNorth CarolinaTax CutsNorth DakotaAlaska Policy ForumOklahoma Council of Public AffairsWisconsinFree-StaterManhattan Institute for Public Policy ResearchCross-Border ShoppingIllinoisMunicipal Individual Income TaxMaineIndividual Income Tax CalculatorSales TaxNew JerseyProperty TaxFix SS NowTennesseeLocal Option Sales TaxColoradoMontanaOhioGovernment BenefitsTax-Rates.comArizonaEmploymentVermontIncome TaxU.S. Census BureauAtlas Van LinesRhode IslandUtahPermanent Wyoming Mineral Trust FundNebraska2014 HGTV Dream HomeTexasOklahomaUnincorporated Business TaxLocal Individual Income TaxIndividual Income Tax CutsPublic Choice EconomicsMassachusettsdiy networkHGTV 2014 Smart Homediy 2014 Blog CabinSouth CarolinaCaliforniaArkansasGeorgiaDr. Arthur WoolfMarylandWyomingHealthcareTax FoundationGordon Tullock2013 Migration PatternsHawaiiTax HavensGovernment Wages and SalariesGross Receipts TaxIndianaFederal Income Tax LiabilityMississippiNew MexicoGovernment WorkforceWashington, D.C.Tax CollectionsWashingtonTax BurdensPennsylvaniaFederal Income Tax BurdenTaxes MatterNew YorkBuckeye InstituteKansasWyoming Taxpayers AssociationInsurance PremiumsSeverance Tax Permanent FundFloridaLake Tahoe CaliforniaJoe The EconomistVirginiaIndividual Income Tax BurdenDelawareProposition 2 1/2Jock TaxManufacturingTransparent NevadaAct 60Social SecurityLouisianaMarginal Tax RatesMissouriSocial Security ReformAlabamaKentuckyIdahoMichigan


Archive

C O N T A C T   U S  -  C L I C K   H E R E