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.


 


 

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

Category List


Tag List

Business Taxes (1)
HGTV 2014 Dream Home (1)
Municipal Individual Income Tax (1)
Welfare Reform (1)
Ali Wolf (1)
Coal Severance Tax Trust Fund (1)
Social Security (1)
Tax Exporting (4)
Internal Revenue Service (1)
Student Loans (1)
Rhode Island (2)
Severance Tax Permanent Fund (1)
Individual Income Tax Burden (3)
Gross Receipts Tax (3)
Sales Tax (1)
Joe The Economist (1)
Florida (3)
Idaho (2)
Hoover Institution (1)
Government Benefits (49)
Transparent Nevada (1)
Proposition 2 1/2 (1)
North Dakota (4)
Georgia (4)
RealEstateConsulting.com (1)
Nebraska (2)
Federal Budget Deficit (2)
Interest Rates (2)
Washington (2)
Manhattan Institute for Public Policy Research (1)
Permanent Wyoming Mineral Trust Fund (1)
West Virginia (2)
Connecticut (3)
Federal Income Tax Liability (2)
Rick Palacios Jr. (1)
Winter Haven Florida (1)
Schaffer's Mill (1)
Property Taxes (1)
Tax Reform (2)
Michigan (2)
Tax Havens (1)
South Dakota (2)
Atlas Van Lines (1)
Alaska (4)
Utah (2)
Free-Stater (2)
Minnesota (2)
Arkansas (2)
Tax-Rates.com (1)
Lake Tahoe California (1)
Healthcare (1)
Marginal Tax Rates (1)
Government Workforce (51)
Wyoming Taxpayers Association (1)
AFDC (1)
Income Tax (1)
New Hampshire (4)
Migration (2)
2014 Blog Cabin (1)
Plausible Baseline (1)
Delaware (2)
2014 HGTV Dream Home (1)
Hydraulic Fracturing (2)
Government Wages and Salaries (48)
Severance Taxes (4)
Tennessee (2)
Kansas (2)
Ohio (5)
Tax Burdens (53)
Montana (2)
Texas (3)
Vermont (3)
IRS (1)
Dr. Arthur Woolf (1)
Employment (1)
Obamacare (1)
Daniel DiSalvo (1)
Council on State Taxation (1)
Robert Hall (1)
Maryland (2)
California Income Tax Burden (1)
Business Enterprise Tax (1)
Colorado (2)
Jock Tax (1)
Alvin Rabushka (1)
Social Security Reform (1)
Nevada (2)
Arizona (2)
TANF (1)
State Business Taxes (1)
diy network (2)
John Mauldin (1)
Aid to Families with Dependent Children (1)
Flat Tax (1)
Temporary Assistance for Needy Families (1)
Government Compensation (48)
Iowa (2)
Alabama (2)
Public Assistance (1)
COST (1)
Property Tax (3)
Proposition 13 (2)
Washington, D.C. (1)
Maine (3)
Local Option Sales Tax (1)
Mississippi (2)
New Jersey (2)
South Carolina (2)
Federal Debt (2)
Tax Foundation (13)
Kentucky (2)
Insurance Premiums (1)
diy 2014 Blog Cabin (2)
Concord Coalition (1)
Law of Unintended Consequences (1)
Public Choice Economics (1)
Individual Income Tax Cuts (1)
Gordon Tullock (1)
New York (3)
HGTV 2014 Smart Home (1)
Oklahoma (2)
Oregon (2)
Local Business Taxes (1)
North Carolina (3)
Cross-Border Shopping (3)
Unincorporated Business Tax (1)
Missouri (2)
California (6)
Massachusetts (2)
Tax Collections (1)
Illinois Policy Institute (1)
Local Individual Income Tax (1)
New Mexico (2)
Wisconsin (2)
Alaska Policy Forum (1)
Bankruptcy (1)
Tax Cuts (1)
U.S. Census Bureau (2)
Government Employment (48)
Oklahoma Council of Public Affairs (1)
Know Your Rates (1)
Wyoming (3)
ALEC (1)
Individual Income Tax Calculator (2)
Veronique de Rugy (1)
Louisiana (2)
Business Flat Tax (1)
Progressive Individual Income Tax (1)
Illinois (3)
Mercatus Center (1)
Act 60 (1)
Taxes Matter (2)
Pennsylvania (2)
Federal Interest Payments (2)
James Buchanan (1)
Indiana (3)
General Assistance (1)
Virginia (2)
Federal Income Tax Burden (3)
2013 Migration Patterns (1)
Manufacturing (1)
Congressional Budget Office (1)
Hawaii (3)
Sales Tax Pyramiding (1)
Census Bureau (2)
Johnny Manziel (1)
John Burns (1)
Fiscal Cliff (2)
Fix SS Now (1)
Buckeye Institute (1)
HGTV 2014 Urban Oasis (1)

Tag Cloud

General AssistanceNebraskaIndividual Income Tax CutsRobert HallAid to Families with Dependent ChildrenCongressional Budget OfficeJames BuchananDr. Arthur WoolfLocal Business TaxesHealthcareCouncil on State TaxationNew YorkProgressive Individual Income TaxMercatus CenterFree-StaterMarginal Tax RatesProposition 2 1/2Business TaxesSocial SecurityIndividual Income Tax BurdenTax FoundationTax ReformNew JerseyMichiganTaxes MatterGovernment CompensationJohnny ManzielTransparent NevadaFederal Interest PaymentsMassachusettsIncome TaxInsurance PremiumsProperty TaxTax BurdensWashington, D.C.Gordon TullockFloridaJock TaxWyomingMaineSocial Security ReformFederal Income Tax BurdenStudent LoansIowaALECSeverance TaxesLouisianaCalifornia Income Tax BurdenLaw of Unintended ConsequencesProperty TaxesIndianaEmploymentMississippiArizonaCaliforniaKansasGeorgiaTax-Rates.comIllinoisNorth DakotaObamacareJoe The EconomistAlabamaVermontWelfare ReformInternal Revenue ServiceWyoming Taxpayers AssociationFix SS NowManufacturingConcord CoalitionTemporary Assistance for Needy FamiliesIndividual Income Tax CalculatorAlaskaTax CollectionsWashingtonNew MexicoGovernment EmploymentLocal Option Sales TaxLocal Individual Income TaxOklahoma Council of Public AffairsKnow Your RatesIdahoConnecticutCensus BureauNorth CarolinaCross-Border ShoppingHawaiiTax HavensColoradoHGTV 2014 Smart HomeJohn MauldinIllinois Policy InstituteHydraulic FracturingWisconsinFiscal CliffBuckeye InstituteRealEstateConsulting.comPermanent Wyoming Mineral Trust FundSeverance Tax Permanent FundBusiness Flat TaxTax CutsTANFFlat TaxAlaska Policy ForumBusiness Enterprise TaxSchaffer's MillGovernment Wages and SalariesTexasAct 60Federal Income Tax LiabilityInterest RatesArkansasSales TaxOhioWest VirginiaBankruptcyMissouri2014 Blog CabinGovernment WorkforceTax ExportingState Business TaxesSouth Carolinadiy 2014 Blog CabinDaniel DiSalvoWinter Haven FloridaHoover InstitutionPlausible BaselineJohn BurnsOregonFederal DebtCOSTMunicipal Individual Income TaxPublic AssistanceNevadaAFDCFederal Budget DeficitKentuckyMarylandLake Tahoe CaliforniaTennesseeU.S. Census BureauMontanaCoal Severance Tax Trust FundManhattan Institute for Public Policy ResearchAtlas Van LinesRick Palacios Jr.2013 Migration PatternsMigrationGovernment BenefitsPennsylvaniaIRSUnincorporated Business TaxAlvin Rabushkadiy networkMinnesotaSouth DakotaVirginiaNew Hampshire2014 HGTV Dream HomeUtahHGTV 2014 Urban OasisSales Tax PyramidingAli WolfVeronique de RugyPublic Choice EconomicsRhode IslandOklahomaGross Receipts TaxHGTV 2014 Dream HomeDelawareProposition 13


Archive

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